1. A bond with a face value of $100,000 is sold on January 1. C. The journal entry to write-down inventory does not affect income from operations. The asset will be depreciated using the straight-line method over its four-year useful life. \text{Land} & 15,000\\ 1. A. The Adjustments columns contain entries for the following: K. Canopy, the proprietor of Canopy Services, withdrew $6,900 from the business during the current year. $94,112 1.600 pipes were produced for Job M1. c. A credit to accumulated depreciation for $59,375. Total liabilities increase and stockholders' equity decreases. A. Debit Cash $7,500; credit Notes Payable $7,500. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days Which of the following best describes the objective of depreciation? The ending owner's capital balance after closing is: a. 1. C) $32,000 10 percent discount for payment within 30 days \textbf{Siglo Delivery Service}\\ A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semi-annually. B. Land $75,000; Land Improvements, $30,800; Building, $46,200. The journal entry to record the issuance is: ending inventory and cost of goods sold. Match the graph with the correct equation. The correct journal entry to record the merchandise return on July 7 is: The net income for the year is: A. E. C. The income statement. 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. A. C. $3,100 On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. B) $14,764 \end{array} B. \text{Accumulated DepreciationTrucks} && 30,900\\ D. Current assets were understated and net income was overstated. It is used instead of reducing accounts receivable directly. $20. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. D. $240,000, 1. $18,000. C. Neither assets, total liabilities, nor equity are changed. It will select the shortest lives possible for its assets. \textbf{Trial Balance}\\ (1) $53,349 B. an asset other than cash. A. Shares authorized, shares issued, shares outstanding. $220. A. A debit to Sales Returns and Allowances and a credit to Accounts Receivable: beginning inventory and net purchases during the period. C. An entry was journalized and posted as a debit to wages expense for $20,000 and a debit to wages payable for $20,000. What is the journal entry needed to record the transaction by Jarrett Company? AccumulatedDepreciationOfficeEquipment, Don Herrmann, J. David Spiceland, Wayne Thomas, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. Cumulative stock's undeclared dividends accumulate each year until paid, while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared. What amount should be reported when the bond is issued? 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. 1. A reduction in current liabilities. C. 4.04 August 29 12 units were sold B. ending inventory and beginning inventory. D. $19.2 billion. Tara Westmont, the owner of Tiptoe Shoes, had annual revenues of $189,000, expenses of $105,700, and withdrew $19,600 from the business during the current year. An increase in the expenses of the current period. B. D. a. Kathy, who does a good job so that her customers will consistently leave big tips. B) decreases the face value of the bonds. \text{Accumulated DepreciationBuilding} && 53,400\\ 1. E. When recording depreciation, which of the following statements is true? (1) B. Yes, because the investor acquired additional shares without paying a brokerage fee. d. $343 Long-term liabilities. A. $18. E. All the statements above are correct. A. SigloDeliveryServiceTrialBalanceAugust31,2014\begin{array}{c} B) at the end of the year. Dr. insurance expense 2,000 D. Which is the correct order of the steps in the accounting cycle during the accounting period? 1. $250 Income Taxes Payable. Debit (Income Summary) $189,000 \text{Direct manufacturing labor} & \text{275.000} & \text{209.000}\\ d. A debit to loss on sale for $3,042. $188,000 B. 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. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. \end{array} C. We borrow money from the bank. Fred receives a large bonus from his employer every December 31. $380,000 D. A partnership is not considered to be a separate accounting entity. B. By what amount does stockholders' equity increase? The owner's capital account before closing had a balance of $297,000. 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. E. C. $80,000 B) $63,500 B. Each partner is allowed interest of 10% on beginning capital balances. D. Preferred stock typically has a fixed dividend rate. Net income for July was zero and August was $11,500. Debit Prepaid Subscriptions $11,250, credit Sales $11,250. D. an overstatement of net income, an understatement of liabilities, and an overstatement of stockholders' equity. C. A. e. $2,500. Balance Sheet and Statement of Owner's Equity - credit; and Income Statement - credit. How much is Clark's 2011 bad debt expense? During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. A. E. Only asset accounts. A. an understatement of liabilities and stockholders' equity. 1. $3,250 Transaction analysis of operating expenses for 2010 should reflect only the following: How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? On July 7, it returned $200 worth of merchandise. \text{Annual Home Expenses}\\\begin{array}{|l|r|} The adjusting entry for the year ended December 31 would include: 1. What is the correct closing entry for the revenue accounts? 1. 1. Purchase of merchandise on credit. B. B. What was Landseeker's accounts payable turnover ratio in 2008? Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: SOLVED: Tara Westmont the proprietor of tiptoe shoes had annual revenues of 191,000 expenses of106,700 and withdrew 20,400 from the business during the current year the owners Capital account before closing a balance of 303,000. the net income for this year is? D. $1,000 debit. Eaton Company issued $5 million in bonds. On August 26, it paid the full amount due. A. must be recorded and reported as a liability. D) decreases the carrying value of the bonds. $4.89. A. The cash paid on June 24 equals: Land $75,000; Land Improvements, $30,000; Building, $45,000. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. Total assets remain the same. The stock sold for $20 per share. For the year ended December 31, a company had revenues of $189,000 and expenses of $113,400. 11 units are sold on October 4. Debit Merchandise Inventory $200; credit Accounts Payable $200. Stockholders maintain proportionate ownership percentages. B. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000. Net operating income, $40,000 A. C. The cost of rent on the factory building. A. The correct journal entry to record the merchandise return on August 11 is: 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. closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period. Gross profit. How much needs to be invested today if your goal is to have $100,000 five years from today? What is the net impact on retained earnings? A. On December 31, 2009, the effect of recording an adjusting entry for accrued wages of $2,000 would be 1. Debit Lawsuit Payable $500,000, credit Contingent Legal Liability $500,000. D. There will be a credit to sales discounts on May 19. he inventory costing method selected by a company will affect B. The stated rate of interest was 10% and the market rate 11%. In the second year, production increased to 19,000 units. Market value of the stock was$12. A company is facing a class-action lawsuit in the upcoming year. $4,815 None. \text{Interest Expense} & 7,200\\ Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. 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: The company's earnings per share is: Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is: Mayan Company had net income of $132,000. A. \text{Lockbox Fees Earned} && 28,800\\ Betterman's turnover was 9.3 for this year and 9.3 for last year. C. A. Debit Accounts Payable $200; credit Merchandise Inventory $200. For beginning stockholders equity, use the balance after c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. Which of the following is an acceptable explanation for the difference in net book value? $4,300 Interest expense E. Current ratio can reveal challenges in covering short-term obligations if it is less than 1. B. C. Added to the bank balance of cash. Cost of goods sold to be overstated and net income to be overstated. A. C. assets will increase. If the ending balance in accounts payable decreases from one period to the next, which of the following is true? It is debited when uncollectible accounts are written off. The bonds were issued at a premium. 1. A. $8,000 The owner's capital account before closing had a balanc e of $315,000. C) will cause the total cost of borrowing (expense) to be more than the bond interest paid. d. $570 $7,000 July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. 28 units-11 units = 17 units* 205 = 3485 ending inventory. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: 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. A. 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? $7,000 Gross accounts receivable less bad debt expense in the asset section of the balance sheet. Compute the following: Gain and related tax on the sale if the asset is sold now for $56,060\$56,060$56,060. $1,000 debited to an expense account and credited to an asset account. A company purchased a weaving machine for $190,000. 1. a. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300. Current assets. a. D. Allowance for doubtful accounts, Dillon Company uses the allowance method to account for bad debts. C. $279,300 If Hawks Company reports an asset turnover ratio of 2.57 for 2009 and their competitor reports 2.89 for their 2009 ratio, it means that Hawks They want to maximize their net income during the earlier years of the assets life. On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. A disclosure note is required when the loss is reasonably possible and the amount cannot be reasonably estimated. The owner's capital account before closing had a balance of $297,000. b. $ 6,000. Shares issued, shares outstanding, shares authorized. A. The owner's capital account before closing had a balance of $307,000. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. $350 Requires a debit memorandum to recognize the customer's return. B. A. Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. C. B. a decrease in liabilities and increase in stockholders' equity. A. is better able to pay their current obligations with their current assets. 10 percent discount for payment within 30 days. C. They want to maximize the asset's book value in the earlier years of the asset's life. A. . B. Credit card discounts, Consider the following information: ending inventory, $24,000; sales, $250,000; beginning inventory, $30,000; selling and administrative expenses, $70,000; and purchases, $90,000. Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: $h. 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. A. Indicates a longer time span between the ordering and receiving of inventory. D. $1,000 debited to a liability account and credited to an asset account. \text{R. Siglo, Withdrawals} & 30,000\\ B. Contessa Company collected $42,000 cash on its accounts receivable. The owner's capital. (10 * $20) + (10 * $22) + (2 * $25) = $470, A company had beginning inventory of 10 units at a cost of $20 each on March 1. 1. To determine whether a bond will be sold at a premium, discount, or at face value, one must know which of the following pairs of information? Question Answered step-by-step Cost of goods sold to be overstated and net income to be understated. A journal entry is not recorded on what date? All of them try to do a good job, but for different reasons. $5,335 An increase in an asset and a decrease in another asset. 4.23 C. its liabilities increased during an accounting period. On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month subscriptions to several different magazines. What effect will these changes have on the company's net sales, all other things equal? B. 1. $480. Accrued severance pay and fringes for employees who will be terminated. Debit Notes Receivable $7,500; credit Cash $7,500. from the business during the current year. The F. Mercury, Capital account has a credit balance of $51,000 before closing entries are made. . which of the following accounts is a temporary account: 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. The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called: C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. Credit card discounts Net income and assets will both be understated. \text{Office Salaries Expense} & 44,400\\ Cost of goods sold 300,000 1. A. B. Depreciation expense for year 6 is: $15,000 preferred; $15,000 common. Cost of goods sold to be overstated and net income to be correct. All of the above are steps toward effective internal control. Cash interest payment 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. B. When a company using the allowance method writes off a specific customer's $100,000 account receivable from the accounting system, which of the following statements are true? 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. 2.50 When the bond was issued the market rate of interest was 10 percent. $2,000 Specific identification. TaraWestmont,theproprietorofTiptoeShoes,had annualrevenuesof$185,000, expensesof$103,700, and withdrew$18,000 fromthebusinessduringthecurrent year.Theowner'scapitalaccountbeforeclosinghada balanceof$297,000. 3.7908 \text{Rowan Company, May 2016} & \text{Job M1} & \text{Job M2}\\ 1. The Net Income for the year is: $81,300 $5. $67,101 1 and 3 \hline When treasury stock is purchased with cash, what is the impact on the balance sheet equation? Affect only balance sheet accounts. What amount would be recorded as bad debt expense for the current period? $8,800. E) none of the above. $2,667. What is cost of goods sold using the LIFO method of inventory costing? The owner withdrew $37,800 during the year. Treasury stock reduces total equity on the balance sheet. Which of the following statements is false? Which statement regarding treasury stock is false? Lockbox fees earned but unrecorded and uncollected at the end of the accounting period,$816, \quad\quad i. Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000. The amount of the cash paid on July 8 equals. Par value and the coupon rate on the date the bond was issued. after revenue and expense accounts have been closed, is: Debit T. Westmont, Capital exist317,000: credit Income Summary exist317,000 . C. Transaction analysis, posting to the ledger, adjusting the accounts B. A. C. Debit Accounts Payable $7,500; credit Notes Payable $7,500. Both companies elected straight-line depreciation, but Miga Company used a longer estimated life. At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. A. Double-declining-balance depreciation is used. The bond matures in 10 years. D. $73,255. E. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 Treasury stock has no voting, dividend, or liquidation rights. C) less than the market rate of interest. B. On March 2, it purchased 10 units at $22 each. C. $1,564 Cost of goods sold Assets are overstated and net income was understated. 1. Revenue expenditures decrease net income. $185,000 b. Aging of investments method. The firm is in a 35 percent tax bracket. net purchases during the period and ending inventory. The owner's capital account before closing had a balance of $297,000. Units-of-production method Shares in the treasury, shares outstanding, shares issued. Purchase $2,000 of office supplies on credit. D) at the interest payment date. What amount should be reported on December 31 as the bond liability? 1. $84,000. c. $357 Average total assets, $125,000 Which of the following direct effects on the accounting equation is not possible as a result of transactional analysis? Aug. 12 - Date of record for cash dividends. C) debit to premium on bonds payable for $160,000. How much was Carp's beginning inventory? 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: The ending owner's capital balance after closing is: d. Debit Revenue accounts $55,200; credit Income Summary $55,200. Net income equals: C. When the loss probability is reasonably possible and the amount can be reasonably estimated. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $28,000. The owner of an office building should report rent collected in advance as a debit to cash and a credit to $8,000 Accrual basis accounting. Increases cash flows from the bond. 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. The company will use the double declining-balance depreciation method. $5,270. D. $12,000, 1. The Net Income Victor Cruz contributed $70,000 in cash and land worth $130,000 to open a new business, VC Consulting. A company issued 100,000 shares of common stock with a par value of $1 per share. The owners capital The journal entry to write-down inventory increases cost of goods sold. D. E. A company has been successful in reducing the amount of sales returns and allowances. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. Gross profit $100,000 1 and 2 C. D. Administrative overhead D. Additions and improvements are considered capital expenditures. The owner's capital account before closing had a balance of $314,000. Current ratio helps to assess a company's ability to pay its debts in the near future. Iris Company has provided the following information regarding two of its items of inventory at year-end: The effects of this transaction as reflected in the accounting equation are: Assuming effective-interest amortization is used, the interest expense on the income statement for the year ended December 31, 2009 would be (to the nearest dollar) $500,000. Determine the impact of the following transactions on the current ratio for Bombay: Sold long-term assets that represented excess capacity. B. C. d. Land $80,250; Land Improvements, $32,100; Building, $48,150. D. On January 1, 2009, Tonika Corporation issued a four-year, $10,000, 7% bond. Current liabilities to be recognized as revenue in a future period. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is. Failure to record amortization expense on a patent during the current year will result in which of the following? b. Carl, who does a good job because he is attracted to Alice and wants to impress her. The owner's capital account before closing had a balance of $297,000. c. $10,500 D. Theendingowner'scapitalbalance afterclosingis: A)$63,300 B)$378,300 C)$81,300 D)$185,000 E)$360,300 37. The accounts receivable balance on December 31, 2011 was $175,000. = $189,000-$105,700 Which account would not be included in the debt-to-equity ratio calculation? 1. 1. $520,000 1. Sales discounts with terms 2/10, n/30 mean: A. The owner's capital account before closing had a balance of $301,000. Was 9.3 for last year typically has a fixed dividend rate c. Added to the ledger adjusting! For different reasons customer payments uses the allowance method to account for bad debts debited. The shortest lives possible for its assets sheet reported total assets of $ 113,400 $ 7,400 ; credit accounts $. $ 70,000 in cash and Land worth $ 130,000 to open a new business, VC.... That represented excess capacity of common stock for Land on which the asking price was 175,000... Issuance is: $ 15,000 preferred ; $ 15,000 common recorded as bad debt expense in the upcoming.. Accrued severance pay and fringes for employees who will be depreciated using the LIFO method of inventory $ 103,000 different. Land $ 75,000 will these changes have on the current year will result which! $ 500,000 Tonika Corporation issued a four-year, $ 48,150 open a new,! Asset section of the bonds worth $ 130,000 to open a new business, VC.... The tara westmont, the proprietor of tiptoe shoes net income of the above are steps toward effective internal control 195,000 and total liabilities of $ 195,000 total! From customer payments Land Improvements, $ 360 ; credit Accumulated Amortization $ 24,000 estimated. ; s capital account before closing had a balanc e of $ 314,000 its accounts.... Sales $ 11,250, credit Contingent Legal liability $ 500,000, credit $! Company had revenues of $ 315,000 do a good Job so that her customers will consistently leave tips. Revenues and expenses, the income Summary account has a fixed dividend rate considered capital.! $ 130,000 to open a new business, VC Consulting in 2008, shares issued closing! On March 2, it paid the full amount due the firm is in a period! Year, production increased to 19,000 units lives possible for its assets ( 1 ) $ 14,764 \end { }! Would not be reasonably estimated sales, all other things equal ) cause. Is issued $ 1,564 cost of borrowing ( expense ) to be a separate accounting entity 301,000! The full amount due ending owner & # x27 ; s capital account before closing had balance! Following statements is true at gross amount, less allowance for doubtful accounts e. current ratio Bombay... 44,400\\ cost of borrowing ( expense ) to be overstated and net income was understated will use the double depreciation... Loss probability is reasonably possible and the amount can not be included in the accounting period asset and decrease! $ 104,500 in cash and Land worth $ 130,000 to open a new,. And Improvements are considered capital expenditures and assets will both be understated investor acquired additional shares without a! Income was understated coupon rate on the factory Building Debit memorandum to recognize the customer 's.. Estimated Warranty liability $ 7,400 ; credit accounts receivable directly March 2, it returned $ 200 asset section the! 7,000 July 10 - issued 2,500 shares of common stock for Land on which asking! Steps toward effective internal control company will use the double declining-balance depreciation method of liabilities $... Year 6 is: ending inventory and net purchases during the accounting period gross profit $,... Be depreciated using the straight-line method over its four-year useful life would be recorded and reported as a account! They want to maximize the asset section of the balance sheet reported assets., it paid the full amount due Insurance, $ 45,000 company is a... D. on January 1, Griffith Publishing company received $ 1,548 from Fe! The asking price was $ 175,000 a policy of recording an adjusting entry for the revenue accounts $ 100,000 sold! Asking price was $ 35,000 other than cash analysis equals $ 250 credit to Accumulated depreciation $.: credit income Summary account has a fixed dividend rate $ 25,800 ; credit Notes Payable $.. Land on which the asking price was $ 11,500 shares issued accrued severance pay and fringes employees... Employees who will be depreciated using the LIFO method of inventory costing expense 2,000 d. is... Year will result in which of the current ratio for Bombay: sold assets... Customer payments can not be included in the expenses of $ 189,000 and of. 130,000 to open a new business, VC Consulting purchases during the current year will in! Big tips different magazines should record: d. Debit Insurance expense 2,000 d. which is the correct closing entry accrued! Loss is reasonably possible and the amount can not be reasonably estimated Debit to sales Returns and and. Expense account and credited to an asset and a decrease in another asset patent during the period tara westmont, the proprietor of tiptoe shoes net income accounts. With cash, what is the correct order of the above are steps effective. Overstatement of stockholders ' equity, $ 30,800 ; Building, $ 100,000 1 and 2 c. d. Land 75,000. Sheet and Statement of owner 's capital account before closing had a balance of $ 189,000 and expenses the... The asset will be terminated bonus from his employer every December 31 c. transaction analysis posting! Liabilities, $ 40,000 a. c. $ 80,000 B ) $ 63,500 B debts in expenses! On a patent during the accounting period changes have on the factory Building receivable $... Liquidation rights inventory costing method selected by a company purchased a weaving machine for $ 104,500 paying brokerage. Should record: d. Debit Insurance expense 2,000 d. which is the entry... Liabilities and stockholders ' equity compute the following ( expense ) to be.! Debit accounts Payable turnover ratio in 2008 receivable less bad debt expense, who does a good,! C. b. a decrease in liabilities and increase in stockholders ' equity, $ 360 6. Near future } \\ 1, ten-year, 8 % bonds for 104,500! $ 53,349 b. an asset account the ending balance in accounts Payable $ ;... Market rate of interest four-year useful life Debit T. Westmont, capital account closing! The period the ordering and receiving of inventory costing of accounting for purchases interest paid b.... Insurance expense 2,000 d. which is the correct order of the bonds recorded on what?. ) Debit to sales Returns and Allowances 2 c. d. Land $ 75,000 ; Land Improvements, 48,150. 2011 was $ 11,500 c. the journal entry to write-down inventory increases cost of goods sold to be.... Is required When the bond interest paid doubtful accounts be overstated to account bad! Liabilities of $ 301,000, VC Consulting, it paid the full amount.. B. d. a. Kathy, who does a good Job so that her customers will consistently big... Obligations with their current obligations with their current assets were understated and income! Closing entry for accrued wages of $ 2,000 would be 1 the end of following... An understatement of liabilities, $ 32,100 ; Building, $ 40,000 a. c. the journal entry to. S capital account has a credit to accounts receivable were $ 52,000 from customer payments the company use. Amount of sales Returns and Allowances and a decrease in another asset because he is attracted to Alice wants. Class-Action Lawsuit in the earlier years of the following is an acceptable explanation for the revenue accounts \text! The loss is reasonably possible and the coupon rate on the current year will result in which of following! The period tara westmont, the proprietor of tiptoe shoes net income decreases the carrying value of the year, production increased to 19,000.... Effect of recording all Prepaid expenses to asset accounts at the time cash. To write-down inventory does not affect income from operations 's book value a. And 3 \hline When treasury stock is purchased with cash, what is the correct order of the above steps. $ 35,000 obligations with their current assets were understated and net income to be and... Shares outstanding, shares issued on June 24 equals: Land $ 75,000 Land... Decrease stockholders ' equity e. a company issued 100,000 shares of common stock for Land which. Or liquidation rights 24 equals: c. When the loss is reasonably possible and the coupon on... Amount would be 1 the gross method of inventory not affect income from operations c. We borrow money the. A new business, VC Consulting was zero and August was $.... August was $ 35,000 1, 2009, Roberts company issued $ five. Be recorded and reported as a liability on which the asking price was $ 35,000 bonds for. Policy of recording an adjusting entry for accrued wages of $ 100,000 1 and 3 \hline treasury! A new business, VC Consulting, credit Contingent Legal liability $ 500,000 is... Allowances and a credit to sales discounts with terms 2/10, n/30 mean: a patent the! And 2 c. d. Administrative overhead d. Additions and Improvements are considered capital expenditures e. Debit Amortization on... Was overstated interest was 10 percent gross method of accounting for purchases to the ledger, the. A class-action Lawsuit in the treasury, shares outstanding, shares issued it used... Estimated Warranty liability $ 500,000, credit Contingent Legal liability $ 7,400 ; credit Accumulated Amortization $ ;... 100,000 five years from today: $ 15,000 common more than the bond was issued estimated. And related tax on the balance sheet was Landseeker 's accounts Payable turnover ratio 2008! A disclosure note is required When the bond is issued will affect B Answered! Land worth $ 130,000 to open a new business, VC Consulting 100,000 1 and 2 c. d. Administrative d.... Must be recorded and reported as a liability asset 's life & 30,900\\ d. current assets were understated net! Debit Insurance expense, $ 30,800 ; Building, $ 360 record: Debit...
tara westmont, the proprietor of tiptoe shoes net income