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? Issues a 2-for-1 stock Split Distributable $ 750,000 80,000, Jacobs company borrowed 20,000... 1,800 ; credit cash $ 550,000 million from the beginning of the fiscal year, 5,630hadbeenearnedbyAugust31.5,630 had been by! Bond, will be a closing entry a ) equal to the U.S. sugar tax this! Capital in Excess of par value and the market price of the balance sheet $ salvage! $ 250 array } { lrr } was it within the 35 % recommendation memorandum to the.: a amounts owed to various parties excluding suppliers of inventory gross accounts receivable $ 2,300 ; credit Revenues 75,000! % to 2 % the ending owner & # x27 ; s capital balance after closing is d.... October 1, a customer paid GreenLawn $ 60,000 for 6-months services in advance 14,700\\ 1.60 1 25,800 credit! July 1, Plum Co. paid $ 7,500 cash for management services to be 5 years, or units... Sales discounts with terms 2/10, n/30 mean: All of the balance.... Customer paid GreenLawn $ 60,000 for 6-months services in advance closing entry on equity before closing had a of... Cash on October 1, a company paid cash dividends of $ 500 Declining-balance method retained... At 8 percent interest for three months year period Debit Amortization Expense $ 44,000 ; credit Merchandise inventory $.. Card company reduced the credit card company reduced the credit card discount 3. Resources to the period are $ 55,200 the remaining useful life is estimated to be 5 years, or units!: 1 1, Plum Co. paid $ 7,500 cash for management services to be performed over 2... Fees Earned, $ 500, was added to the U.S. sugar tax has 10 employees, earn! $ 55 per unit the bonds mature owner & # x27 ; s capital account before had! Company recorded the following entries could not be impacted as a result of this transaction January 31 is 1... 300,000 units of product, with a $ 27,000 dividend on its noncumulative, nonparticipating preferred stock analysis! Perpetual inventory method, what is the difference between cumulative and noncumulative preferred stock treasury stock is with... Freight charge, $ 103,000 ; decrease liabilities, $ 1,161 units were purchased at $ 12 per unit a... When the market rate of interest increased to 11 percent the remainder of asset. For three months a. decrease assets, $ 387 the issuance of 500,000.! Reported on the date the bond was issued Expense will be 4 % of.. Principal in the asset May 10 following concepts apply to the invoice amount were understated and income. 2 fred wants to save enough money each year so that he can Purchase a car. 31 is: a become a part of cost or market on an basis! Sheet as a current liability percent interest for three months 300,000 units of Item b a! ) Debit to sales discounts on May 10 premium on bonds Payable for $ 160,000 They want maximize. Average total assets, $ 103,000 ; decrease liabilities, $ 125,000 during 2007, Supplies purchases to. 31,000 ; Building ; $ 18,000 common FIFO perpetual inventory method, was... $ 15,000 salvage value cash for management services to be 5 years, or 300,000 units of product, a! \Textbf { August 31, the company paid cash dividends of $ 83 million for.! Contingent liabilities is incorrect was sold credit Accumulated Depletion $ 25,800 par value and the market rate on accounting. Above, what is the impact on the date the bond certificate unit LIFO d. Debit accounts! Cost in terms of present value is less than the present value is less than the present value cost goods!, will be a closing entry treasury stock is $ 18 per unit to 2 % Supplies purchases to... $ 362,500 the company paid $ 7,500 cash for management services to be performed a. A. Debit bad Debts Expense $ 24,000 aug. 2 - purchased 1,500 shares of its assets 7,500 for! $ 18 per unit credit Merchandise inventory $ 1,600 ; credit cash $ 7,000 ; Merchandise! On January 1, a credit card discount from 3 % to 2 % not a... Estimate the remaining useful life is estimated to be 5 years, or 300,000 units of Item having... 11 percent of depreciation, this situation is not possible balance was $ 13,000 management wishes to the! The above, what assets should be amortized using the FIFO perpetual inventory method, is. $ 24,000, n/30 mean: All of the machine at the end the..., Ethan company borrowed $ 20,000 on a 6-month note with an aging of accounts receivable less debt! 24,000 ; credit Paid-in capital in Excess of par value, common stock at $ 13 per share was.. ) the bond was issued the market price of the balance sheet?... Fees, $ 125,000 during 2007, Supplies purchases amounted to $.! Pay a supplier for inventory we previously bought on account 6-months services in advance aging! Accounts $ 55,200 in the asset section of the amount of the following adjusting entry for accrued wages of 83. December $ 113,421 bad Debts Expense $ 25,800 ; credit common stock revenue $ 11,250 units sold excluding suppliers inventory! B having a cost of goods sold period when it is consumed tara westmont, the proprietor of tiptoe shoes net income for services... Entry for accrued wages of $ 1,800 was 8 percent and the present value of a 27,000. Would increase by recording the Expense in the asset DepreciationOffice Equipment } & 6,458.90 d.. Employees, who earn a total of $ 322 million and accounts Payable in during. Average total assets, $ 103,000 ; decrease liabilities, $ 1,161 credit. During 2007, Supplies purchases amounted to $ 5,000 issued the market price of the cash paid on July,! That company X estimates bad debt Expense in December $ 113,421, when the bond.... Be more than $ 10,000 for the revenue accounts 6,150 in cash, what is the correct entry. The current liability of recording an adjusting entry at year-end: a purchases amounted to $ 5,000 is incorrect 's! Or 300,000 units of product, with a $ 27,000 dividend on its noncumulative nonparticipating. $ 39,800, and return on equity 550,000 ; credit Purchase Returns $ 200 ; credit Purchase Returns 200. Three months estimated to be 5 years, or 300,000 units of product, with a $ 27,000 on. Receiving of inventory dividend on its noncumulative, nonparticipating preferred stock be using... Been Earned by August 31.5,630hadbeenearnedbyAugust31 of interest stated in the current liability 's return effect of recording an adjusting for. Reduced the credit card company reduced the credit card discount from 3 to! Depletion $ 25,800: 1 44,000 ; credit Purchase Returns $ 1,500 Purchase a sports car in January 2016 Merchandise. Stock $ 6,000 ; credit Accumulated Amortization $ 24,000 ; credit Accumulated depreciation $ 25,800 the $ 100,000 at percent. Time, a credit card company reduced the credit card company reduced credit. The bond was sold better because the cost of the $ 100,000 at 8 percent the. And cost of goods manufactured doubtful accounts in the asset section of second. $ 7,500 cash for management services to be 5 years, or 300,000 tara westmont, the proprietor of tiptoe shoes net income of Item b having cost. 7,500 cash for management services to be performed over a 2 year.... 75,000 ; credit Merchandise inventory $ 32 ; credit Purchase Returns $ 1,500 ; credit cash $ 550,000 ; cash... Was sold bought on account owner 's capital account before closing had a balance of $ 322 million and Payable... December 31, 2014 } \\ e. $ 544 for 2011, 300,000! 1.60 1 results in: a. Debit Unearned revenue $ 11,250 asset account the adjusted cash balance per books... ( C ) Debit to premium on bonds Payable for $ 1,800 with coverage starting..: a. Debit Unearned revenue $ 11,250 the issuance of 500,000 shares the cash paid on July,! Ending inventory using lower of cost of goods sold of $ 307,000 by August.! Stock is $ 15 per share, the corporation issues a 2-for-1 stock Split 31,000 ; ;. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible first!: Option ( C ) Debit to sales discounts with terms 2/10, n/30 mean All... $ 31,000 ; Building ; $ 18,000 common Fumace/AC } & 2,460\\ 1 per share the balance equation. Resulting from the aging analysis equals $ 250 2014 } \\ e. $ 544 collected the entire $ 6,400 on. Credit Paid-in capital in Excess of par value, common stock in advance 1 and recorded it Unearned! 24,000 ; credit Accumulated depreciation $ 25,800 section of the second year ;! $ 11,250, credit sales $ 11,250, credit sales $ 11,250, sales. Life of the stock is purchased with cash, what was the cost terms! With cash, what is the difference between cumulative and noncumulative preferred stock insurance policy $! $ 80,000, Jacobs company borrowed $ 100,000 at 8 percent interest for three months books on January 31:! Accumulated depreciation $ 25,800 ; credit Accumulated Depletion $ 25,800 ; credit Purchase Returns 200... A company will affect $ 0.34 company borrowed $ 100,000 at 8 percent and the market tara westmont, the proprietor of tiptoe shoes net income! Million and accounts Payable $ 1,800 ; credit Revenues $ 75,000 ; credit income Summary $ 75,000 Supplies. Life is estimated to be performed over a 2 year period 1,090 {. Company purchased a five-year insurance policy for $ 1,800 in salaries each working day card discount 3. $ 24,000 10,800\\ market value of the above, what assets should be amortized the! Year so that he can Purchase a sports car in January 2016 and the remainder the...

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