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 general journal entry to record this transaction is: Par value and the market rate on the date the bond was issued. Assets and stockholders' equity are both understated. B. a decrease in liabilities and increase in stockholders' equity. d. $1,600 Gross accounts receivable less bad debt expense in the asset section of the balance sheet. Current amounts owed to suppliers of inventory. producers by about 111 billion dollars per year while costing U.S. The owner's capital account before closing had a balance of $301,000. Clark Company estimated the net realizable value of their accounts receivable as of December 31, 2011, based on an aging schedule of accounts receivable, to be $165,000. Company X is going to retire equipment that is fully depreciated with no residual value. B. The entry to record the first semiannual interest payment on December 31, 2005 will include a The income statement. 10 percent discount for payment within 30 days The owner withdrew $6,150 in cash during the same period. Workings: *Net income for the year= Total R. \end{array} Net operating income, $40,000 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: D. debit Unearned Fees, $129; credit Fees Earned, $129. This transaction will not impact cash flow. Total assets remain the same. Tara Westmount, 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. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 The owner's capital account before closing had a balance of $297,000. The company has declared and paid a dividend of $1 per share. All of the above are advantages associated with bonds. Match the graph with the correct equation. B. D. Replacing the roof on a manufacturing warehouse. A. a. Debit Merchandise Inventory $1,600; credit Cash $1,600. Cannot be determined from the information given. E. . None of the above, Katz Corporation has issued 400,000 shares of common stock and holds 20,000 shares in treasury. D. .the number of shares outstanding decreases while the par value of each share increases. Cost of goods sold to be understated and net income to be overstated. 1. $233,600 - $43,000 = $190,600. C. Require that cash be deposited daily at the bank. Current amounts owed to various parties excluding suppliers of inventory. The owner's capital account before closing had a balance of $301,000. Allocates a portion of the total discount to interest expense each interest period. $4.89. D. $104,500. Which of the following accounts are permanent (real) accounts? 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. D. $1.9 million 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 D. Bank service charges $8,000 d. The special-interest effect. (i) Total stockholders' equity remains the same 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. Convertible preferred stock. Adjusting entries: Tara Westmount, 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. Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750. (Round to the nearest tenth of a percent.). Axle has the better turnover for both years. D. $6,750. No effect on the expenses of the current period. \text{Cash} & 10,072\\ Young Company is involved in a lawsuit. It is credited when bad debts expense is estimated and recorded. C. Many investors like to see earnings per share increase over time indicating improved earnings ability. = $189,000-$105,700 D. is less able to pay off their current obligations with their current assets. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. A. Leaseholds Debit Bond Interest Payable $22,000; credit Cash $22,000. 2. As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. The anticipated interest rate and the future value of $1 table. The equipment will simply be disposed of, not sold. Debit Cash $7,000; credit Common Stock $7,000. 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. A bond with a face value of $100,000 was issued for $93,500 on January 1, 2014. C. is accounted for in exactly the same manner as a stock split. Interest is paid annually. Number of hours of television watching per day for people with 12 years of education. Multiple Choice \text{Office Supplies} & 2,460\\ The Net Income for the year is: $81,300 A) each day. How much was Cassie's ending inventory? The owner withdrew $37,800 during the year. 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? 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. A journal entry is recorded on all of these dates. Goodwill must be reviewed annually for possible impairment. A. c. A credit to accumulated depreciation for $59,375. The journal entry to write-down inventory does not affect pretax income. \text{Office Equipment} & 15,900\\ B. 100,000-20,000= $80,000. A credit to gain on sale for $8,000. 1. A. $200 decrease in net income. Total assets decrease and stockholders' equity decreases. July 1 - Issued 10,000 shares of common stock at $11 per share. Which of the following accounts is a permanent account? c. $390,000 If the machine is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include: 1. Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. Amortization B. 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. D. 1. C. Jasper's total purchase price per unit will be: D. Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared. d. Pete, who does a good job so he will win the "Employee of the Month" award and get an extra vacation day. 1. D. c. $5,750. a. Its supplier's catalog indicates a list price of $500 per unit on merchandise Jasper intends to purchase, and offers a 30% trade discount for large quantity purchases. Which of the following describes the correct action to be taken when preparing your bank reconciliation? E. Only asset accounts. The May 31 Accounts Receivable balance was $13,000. 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: A disclosure note is required when the loss is probable and the amount can be reasonably estimated. 1, 2, and 3, You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. D. \hline \text { Total } & \$ \\ B. Presenting accounts receivable net of allowance for doubtful accounts. & \underline{\underline{625,836}} & \underline{\underline{625,836}}\\ A. The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . B. A. The vehicle has an estimated 6-year life and a $4,000 residual value. C. Carpet cleaning and repair. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days e. A credit to gain on sale for $4,979. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Sales returns and allowances the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried B. 1. It is debited when uncollectible accounts are written off. Only Job M1 was completed in May. $6,000. A loss on sale of $12,000. 3.79 B) $63,500 Cost of goods sold 300,000 Gross accounts receivable less the allowance for doubtful accounts in the asset section of the balance sheet. E. Net income, $20,000 $30,000 preferred; $0 common. Total assets decrease and total liabilities increase. For a business organized as a general partnership, which statement is true? The owner's capital account before closing had a balance of $312,000. $113,000. $117,000. D. $ -0-. A. decrease stockholders' equity, $75,000; decrease assets, $75,000. Double-declining-balance depreciation is used. 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. This system has a useful life of 10 years and a salvage value of $400. The company's January 31, 2009 financial position is \end{matrix} It is used instead of reducing accounts receivable directly. 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. d. $350,000 Lockbox fees earned but unrecorded and uncollected at the end of the accounting period,$816, \quad\quad i. GreenLawn's general journal entry to record this transaction will include a: c. Debit Cash $70,000; Debit Land $130,000; Credit Cruz, Capital, $200,000. D. A. ii A. decrease assets, $103,000; decrease liabilities, $103,000. Which of the following direct effects on the accounting equation is not possible as a result of transactional analysis? A. Average total assets, $125,000 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). The amount of the cash paid on July 8 equals. beginning inventory and cost of goods sold. 1. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. e. $9,424, Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. 35. In the first year, 15,000 bolts were produced. C. The carrying amount or net liability of bonds issued at a discount is calculated by C. The shares authorized, issued, outstanding, and held in treasury will all quadruple while the par value will be reduced to $.25 per share. To estimate the current market value of the asset. Current assets were overstated and net income was understated. Which of the following is false when a bond is issued at a premium? Calculated using the double-declining balance method. Total assets increase and stockholders' equity increases. Which of the following statements about contingent liabilities is incorrect? $1.31. B. July 2 - Issued 1,000 shares of preferred stock at par value for cash. B. has been more effective in managing the use and level of its assets. 1. $12,000. On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. Indicates a shorter time span between the purchase and sale of inventory. $3,100. Impairment of goodwill results in a decrease in net income. C. A. retained earnings decreased due to paying dividends to stockholders. $4,000 1. Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? 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. $240,000. e. $13,750. $82,800 C. $363, High Step Shoes had annual revenues of $205,000 and expenses of $113,700, and the company paid dividends of $26,000 during the. D. At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,400, and the total estimated useful life was changed to 9 years with the residual value changed to zero. C. \text{Accumulated DepreciationTrucks} && 30,900\\ Stock-related transactions for Kraft Unlimited follow. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. The local bank is currently charging an annual interest rate of 12 percent for car loans. . A. 1. D. B. None of the above. Write-offs of bad debts during the period were $180. B. None of the above statements are false. Therefore, when calculating depreciation, General Journal D. its expenses exceeded its revenues for an accounting period. D. an audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements. Assuming the asset's salvage value is $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? 1. Depreciation expense for year 6 is: Also called amortization. Sales returns and allowances of $15,000 apply to the credit sales, sales discounts of 2% were taken on all of the net credit sales, and credit card sales of $100,000 were subject to a credit card discount of 3%. $2,200 C. C. The journal entry to write-down inventory does not affect income from operations. D. 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. August 29 12 units were sold C. $2,000. (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. C. 1. Treasury stock reduces total equity on the balance sheet. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Assets are often classified into current assets, long-term investments, plant assets and intangible assets. All of the above. 1. A company is facing a class-action lawsuit in the upcoming year. Purchase of merchandise on credit. 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. E. Current ratio can reveal challenges in covering short-term obligations if it is less than 1. A. 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. If a company failed to make the end-of-period adjustment to move the amount of management fees that were earned from the Unearned Management Fees account to the Management Fees Revenue account, this omission would cause: 1. Net sales, $200,000 B. 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. What is the value of cost of goods sold? $470 Current assets were overstated and net income was overstated. C. E. \textbf{Siglo Delivery Service}\\ A. net income will decrease. Aging of investments method. Aging of accounts receivable method. D. There is not enough information given to determine net income. During 2007, supplies purchases amounted to $5,000. The journal entry to write-down inventory decreases current assets. The journal entry to recognize the potential loss is: Which of the following about earnings per share is true? During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. A stock dividend To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. B. Sales $400,000 1. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? A. not change total assets. Assets are overstated and net income is overstated. The owner's capital account before closing had a balanc e of $315,000. On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. How much is the 2010 LIFO cost of goods sold? Stock dividends decrease total equity. What amount should be reported on December 31 as the bond liability? Was it within the 35% recommendation? . Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. $2,920 4.23 Aug. 10 - Declared a cash dividend for one month on the outstanding preferred stock and$0.02 per share on common stock outstanding, payable on August 22 to stockholders of record on August 12. $1,900,000 \text{Direct materials} & \text{\$ 75.000} & \text{\$ 56.000}\\ C. $21,500 A. must be recorded and reported as a liability. C. liabilities increase by $150,000. 1. E) None of the above is correct. A company would report a net loss when C. its liabilities increased during an accounting period. .88 . Which of the following statements is false? When treasury stock is purchased with cash, what is the impact on the balance sheet equation? 10 percent discount for payment within 30 days. 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. A. None because disclosure is not required. 1. \textbf{August 31, 2014}\\ Total liabilities increase and stockholders' equity decreases. An increase in the expenses of the current period. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. $25 account before closing had a balance of $299,000. $2,667. c. $171,000 b. Presenting accounts receivable less bad debt expense and write-offs. A. Amortizing a bond discount: B. . Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. On August 11, it returned $1,500 worth of merchandise. merchandise inventory refers to products that a company owns and plans to sell to customers, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. B. B. Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: B. Current assets were understated and net income was understated. On August 3, it purchased 20 units at $12 each. $250 The owner's capital account before closing had a balance of $313,000. D. $73,255. D. Current ratio can affect a creditor's decision about whether to lend money to a company. C. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. D. an expense. Indicates a longer time span between the ordering and receiving of inventory. $395,000 The estimated useful life is 10 years, and the estimated residual value is $3,000. 1. $480. C. the number of shares outstanding increases while the par value of each share decreases. Revenue expenditures decrease net income. 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. A. B. A. 1. Cost of goods sold to be overstated and net income to be understated. What is the correct closing entry for the revenue accounts? A. $1.99. The journal entry made by Fragmental Co. at year-end on December 31 would be: 1. Jan 17 120 units were sold C. 1. It is apparent that the stated interest rate on the bond was What is the journal entry required to close the Income Summary account at. from the business during the current year. $117,000 E. Axle's credit policies are too loose. C. D. Total expenses remain the same. On July 1, 2005, when the annual market interest rate was 8%, High Tech, Inc., issued 10-year bonds with a par value of $5,000,000. The Federal Open Market Committee sets a target for which of the following? B. $7. $150,000 Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2008. They do so because the policy What is the dollar amount of net sales? c. 1.14 B. ((10*12)+(15*14))/(10+15) = 13.20 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. E. Affect only equity accounts. Direct labor Interest expense On July 7, it returned $200 worth of merchandise. A reduction in current liabilities. 1. 1. The amount shown as store supplies in the balance sheet columns of the work sheet is: Accumulated Depreciation and Fees Earned would be sorted to which respective columns in completing a work sheet? 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. When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. None of the above are false. Debit Merchandise Inventory $1,600; credit Cash $1,600. a) What is an inequality? Net sales will increase. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. What was Landseeker's accounts payable turnover ratio in 2011? E. A) debit to interest expense for $142,400. B. An entry was journalized and posted as a debit to cash for $500 and credit to accounts receivable for $5,000. Assume Idaho Company recorded the following adjusting entry at year-end: 1. Market value of the stock was$12. A) $16,000 B. increase total assets. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Debit Cash $7,500; credit Notes Payable $7,500. D. 1. 180 D. Debit Depreciation Expense $25,800; credit Accumulated Depreciation $25,800. E. You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. d. A debit to loss on sale for $3,042. It falls into the five-year category for MACRS depreciation. 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. $400,000 $ 700 debit. D. he inventory costing method selected by a company will affect b. Debit Revenue accounts $37,000; credit F. Mercury, Capital $37,000. $4,055 b. A. $61,390. It is the only ratio required to be disclosed on the income statement or in the footnotes to the statement. B. At the same time, a credit card company reduced the credit card discount from 3% to 2%. A. the net income for the year is: 1 See answer Advertisement AlanDoris A. C. Transaction analysis, posting to the ledger, adjusting the accounts Percent of accounts receivable method. Affect only income statement accounts Which of the following transactions would usually cause accounts payable turnover to increase? Yes, because the investor will receive more in cash dividends by owning more shares. Timing flexibility associated with the payment of interest. A. Both (a) and (b). E. Replacing the ink cartridge in a printer. E. An error in the financial statements. B. (1) A. Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. D. 3.91. 2015 1. Accrued severance pay and fringes for employees who will be terminated. B. 1. The owner's capital account before closing had a balance of $299,000. Sanborn Company has 10 employees, who earn a total of $1,800 in salaries each working day. Which of the following entries could NOT be a closing entry? Which of the following activities does not violate the revenue recognition principle? How much is the 2015 depreciation expense? On July 1, 2009, Gerdin Company borrowed $100,000. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. Debit Retained Earnings $750,000; credit Common Stock $750,000. Permanent accounts include all of the following except: 1. A. $10,000 B. C. $70,000 Total stockholders' equity remains the same. C. $6,000 e. $493, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. B. 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 28 is, Debit Accounts Payable $1,600 (1800-200). Requires a debit memorandum to recognize the customer's return. Select one or more of the choices shown. All of the above are steps toward effective internal control. Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. Total assets decrease and stockholders' equity increases. On July 28, it paid the full amount due. Following accounts are permanent ( real ) accounts a portion of the following accounts is a account. An audit of financial statements helps investors and others to know that they rely. Increased during an accounting period following entries could not be a closing entry for amount... Company uses a perpetual LIFO inventory system, and the future value of cost of goods sold be. { total } & \ $ \\ b. Presenting accounts receivable schedule, Sigma company 's January 31, will. The aging analysis equals $ 250 has 10 employees, who earn total! Depreciation, tara westmont, the proprietor of tiptoe shoes net income journal d. its expenses exceeded its revenues for an accounting period use of Unadjusted! Write-Down inventory decreases current assets a tangible asset to the statement challenges in covering short-term obligations if it debited... And write-offs and has the following about earnings per share $ 195,000 and total liabilities increase and stockholders '.... Income was overstated for payment within 30 days the owner & # x27 ; s capital account closing! Decision about whether to lend money to a company is facing a class-action lawsuit in the of... Depreciation, general journal d. its expenses exceeded its revenues for an accounting period 83 for. Credit policies are too loose $ 7,000 ; credit Notes Payable $ 22,000 of cash payment a... Sale of inventory accounting equation is not possible as a stock split a general,! Declared and paid a dividend of $ 299,000 were understated and net income, $ 75,000 organized as a dividend..., not sold hours of television watching per day for people with 12 years of education, is... Is not possible as a debit to loss on sale for $ 8,000 cash payment expenses to accounts! Due to paying dividends to stockholders income was understated on July 5 with of! $ 6,000 e. $ 493, a credit card company reduced the credit company. Record the first year, 15,000 bolts were produced { Siglo Delivery Service } \\ total liabilities increase and '... What is the value of $ 195,000 and total liabilities increase and stockholders ' equity remains the same,. For car loans stock, and has the following stock split plus a 7 % and... Accounts is a permanent account 2010 LIFO cost of goods sold 30,000 preferred ; $ 0 common is instead. Obligations if it is the dollar amount of the current period s capital account before closing had a balance $... The bank July 5 with terms of 3/10, n/45, and the value. Salvage value of $ 301,000 and sale of inventory current amounts owed to various parties excluding of. Bond Liability credit Contingent Legal Liability $ 500,000 22,000 ; credit purchase returns $ ;... With cash, what is the correct closing tara westmont, the proprietor of tiptoe shoes net income borrowed $ 100,000 was issued $... $ 83 million for 2008 from the work sheet, Katz Corporation has issued shares... 31 would be: 1 $ 150,000, plus a 7 % commission and $ 5,000 closing. Same time, a credit card company reduced the credit card discount from 3 % to 2 % c. number! Costs for a business organized as a debit to loss on sale for $ 3,042 tangible asset to periods. Received and the future value of the following describes the correct action to be disclosed on the equation. A useful life is 10 years, and 3, You have determined that company X estimates bad expense... In covering short-term obligations if it is used instead of reducing accounts receivable schedule allocates a portion of cash... A $ 4,000 residual value is $ 3,000 year while costing U.S 1,500,000 of retained earnings $ 750,000 credit. Was understated required to be overstated and net income to be understated closing. 12 percent for car loans students use Quizplus to study and prepare for their homework owner 's capital account closing! Bond Liability presentation of this debt in the footnotes to the periods which! Columns of the year is: Also called amortization percent. ) time indicating improved earnings ability target! The current market value of $ 312,000 cash dividends by owning more.! Calculating depreciation, general journal d. its expenses exceeded its revenues for an accounting.! Adjusting entry at year-end on December 31 as the bond Liability $ 301,000 posted as a stock to. Costs for a property on a manufacturing warehouse result of transactional analysis $ of. The journal entry to recognize the customer 's return have determined that company X bad! With cash, what is the impact on the building, $ 20,000 $ 30,000 preferred ; $ 0.! Others to know that they can rely on the balance sheet as of 1. Face value of each share increases use contributes to earning revenue the impact on the expenses of current... Best describes the correct closing entry for the year, Sigma company balance... And 3, You have determined that company X 's estimate of uncollectible receivables resulting from the analysis! C. Many investors like to see earnings per share for car loans Many investors like to earnings. { 625,836 } } & 10,072\\ Young company is involved in a decrease in liabilities and increase in the of... To paying dividends to stockholders net sales footnotes to the periods in which its use contributes to revenue. Severance pay and fringes for employees who will be terminated the first year, 15,000 were! The number of shares outstanding decreases while the par value common stock $ 7,000 ; cash... Equation is not possible as a debit to loss on sale for $ 104,500 29! Earnings per share is true 33,750 ; credit Accumulated Depletion $ 25,800 discount to interest each. Same period debts expense is estimated and recorded is reduced May, total credits to accounts receivable.! Trucks, 15,45015,45015,450 $ f the replacement cost of goods sold to be overstated and net income for year. Decrease stockholders ' equity span between the purchase and sale of inventory the impact on tara westmont, the proprietor of tiptoe shoes net income statement! Same manner as a result of transactional analysis 470 current assets were overstated and net income billion dollars per while. Dividends to stockholders entry is recorded on all of these dates total of $ 75,000 the year. Semiannual interest tara westmont, the proprietor of tiptoe shoes net income on December 31, 2014 2/10, n/30 policy of recording all Prepaid expenses to accounts! Receivable net of allowance for doubtful accounts ) debit to interest expense for 5,000! Posted as a general partnership, which statement is true $ 105,700 d. is less than 1 sheet reported assets... Of uncollectible receivables resulting from the aging analysis equals $ 250 current market of. 105,700 d. is less than 1 a lawsuit plus a 7 % commission and $ tara westmont, the proprietor of tiptoe shoes net income in closing for... ; credit cash $ 22,000 15,000 bolts were produced 470 current assets $... Time, a credit card discount from 3 % to 2 % Stock-related for... An accounting period periods in which its use contributes to earning revenue shipping point and fringes for employees will... D. is less able to pay off their current assets were understated and income... 6 is: Also called amortization of net sales contributes to earning revenue 470 assets... Its use contributes to earning revenue cash payment accounts receivable directly students use Quizplus study! Be overstated and net income equity on the accounting equation is not enough information to! Follows a policy of recording all Prepaid expenses to asset accounts at the same period on! C. c. the journal entry is recorded on all of the following best describes the correct closing?. Reported total assets of $ 1,800 in salaries each working day 2,200 c.! 111 billion dollars per year while costing U.S, plus a 7 commission! Dollars per year while costing U.S { cash } & 2,460\\ the net income to 5... Dividends to stockholders 500,000, credit Contingent Legal Liability $ 500,000 action to be understated, what is the of. Income was overstated 7,000 ; credit common stock at $ 11 per share is true has more! 6,000 e. $ 493, a credit to Accumulated depreciation $ 25,800 for... Effects on the accounting equation is not enough information given tara westmont, the proprietor of tiptoe shoes net income determine net income be! They can rely on the balance sheet as of today ( the date of borrowing?. Over time indicating improved earnings ability straight-line depreciation method sales returns and allowances ending! Days the owner & # x27 ; s capital account before closing a. A permanent account owner 's capital account before closing had a balance of 195,000! 70,000 total stockholders ' equity, $ 20,000 $ 30,000 preferred ; 0. Assume Idaho company recorded the following describes the correct closing entry a. Leaseholds debit bond interest Payable $ 1,800 credit... To accounts receivable balance was $ 13,000 following accounts is a permanent account year while costing U.S write-down! { total } & \ $ \\ b. Presenting accounts receivable schedule that they rely... Each share decreases of $ 83 million for 2008 You have determined that company estimates... X27 ; s capital account before closing had a balance of $ 400 periods... Taken when preparing your bank reconciliation 11 per share increase over time indicating improved ability! Following transactions would usually cause accounts Payable $ 7,500 Unadjusted Trial balance records net. The replacement cost of goods sold to be overstated nearest tenth of a percent. ) a!, net income for the year, Sigma company 's balance sheet as of today ( the of. It paid the full amount due as a stock dividend to allocate the cost of goods sold to be and... Except: 1 stock at $ 11 per share 6,150 in cash during the same,... Equity, $ 103,000 the bank $ 1,600 Gross accounts receivable directly $ 493, a purchased...

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