C. The debit to cash will be less than the credit to accounts receivable on May 19. C. Cash payment for dividends previously declared. A loss on sale of $12,000. c. The collective-action problem. Indicates a shorter time span between the purchase and sale of inventory. D. .the number of shares outstanding decreases while the par value of each share increases. None of the above are true. 1. $8,800. Sanborn Company has 10 employees, who earn a total of $1,800 in salaries each working day. 1. A company purchased a weaving machine for $190,000. 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. What is the value of cost of goods sold? A. Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi 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). C. Recording the expense in December when it is incurred will increase expenses $188,000 B. E. Only asset accounts. b. Debit Cash $1,600; credit Accounts Payable $1,600. D. The journal entry to write-down inventory increases cost of goods sold. The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. Is recorded when a customer takes a discount. (Refer to footnote 4 in the chapter.). Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. Contessa Company collected $42,000 cash on its accounts receivable. A machine costing $75,000 is purchased on September 1, Year 1. It will select the shortest lives possible for its assets. 1. B. (2) and (3) Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: Treasury stock has no voting, dividend, or liquidation rights. d. $10,300 Affect only income statement accounts Explain your answer. $20,000 B. A. B. Debit Unearned Revenue $45,000; credit Cash $45,000. C. $80,000 Debit (Income Summary) $189,000 However, the ending inventory was overstated by $20,000. D) will have no effect on interest expense by the time the bonds mature. Can the work sheet be used as a substitute for the financial statements? Which of the following is not a component of the cost of inventory? 3.99 E) none of the above. When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. Balance Sheet and Statement of Owner's Equity - credit; and Income Statement - credit. D. $12,000, 1. 1, 2, and 3, You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. $100,000 A. Gross profit. Maks, Inc., uses straight-line depreciation for all of its depreciable assets. A. Direct manufacturing labor is paid at the rate of $25 per hour. On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300, On February 1, a customer's account balance of $2,300 was deemed to be uncollectible. D. $1,000 debit. . Match the graph with the correct equation. $7,000 Cost of goods sold to be understated and net income to be understated. Betterman's turnover was 9.3 for this year and 9.3 for last year. B. E. Debit Dividend Expense $12,000; credit Cash $12,000. .88 $5,002 7.7217. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 What journal entry would be needed to record the machines' first year depreciation under the units-of-production method? On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. The owner's capital. C. What is cost of goods sold using the FIFO method of inventory costing? D. must be reported as a liability, but not recorded. Total assets decrease and total liabilities increase. A. revenues of $187,000, expenses of $104,700, and withdrew $18,800 B. C. At the December 31, 2005, accounting year end, what is the balance of the Bond Premium account (using effective-interest amortization) after all adjusting entries have been completed? E. $9,000. None of the above, Katz Corporation has issued 400,000 shares of common stock and holds 20,000 shares in treasury. B. Sales $400,000 D. $6,750. 2 \text{Gas, Oil, and Truck Repairs Expense} & 31,050\\ E. Total assets increase and equity decreases. 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. A company estimates that warranty expense will be 4% of sales. Credit. 1. A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. e. $9,424, Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. C. Replacement of all florescent light tubes in an office. $2,920 D. D. Transaction analysis, journal entries, posting to the ledger. a. Debit Merchandise Inventory $1,600; credit Cash $1,600. A stock dividend 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? Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000. D. B. auditors have the primary responsibility for the information contained in financial statements. 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: B) stated rate of interest is greater than the market rate of interest. Debit Bond Interest Payable $22,000; credit Cash $22,000. $4,000 The owner's capital account before closing had a balance of $314,000. $63,000 c. $81,000 d. $360,300 e. $378,300 a. Kathy, who does a good job so that her customers will consistently leave big tips. Neither a gain nor a loss is recognized on this transaction. 1. Siglo,WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas,Oil,andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a. Jan 29 150 units were sold When using the effective-interest method of amortization, interest expense reported in the income statement is impacted by the Which order best describes the largest number of shares to the smallest number of shares? = $189,000-$105,700 B. does not need to be recorded or reported as a liability. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. Which of the following costs does not become a part of cost of goods manufactured? $3,270 D. Straight-line method The Federal Open Market Committee sets a target for which of the following? D. When the loss is probable regardless of whether the loss can be reasonably estimated. 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. D) the bond is convertible to common stock. Date of payment. The sale of bonds above face value Betterman's turnover is improving. An increasing inventory turnover ratio $100,000 Date of declaration. 120. August 18 15 units were purchased at $14 per unit Credit card discounts Debit Bond Interest Expense $22,000; credit Cash $22,000. 1. A. 1. C. is accounted for in exactly the same manner as a stock split. The asset will be depreciated using the straight-line method over its four-year useful life. Failure to make a necessary adjusting entry for accrued interest on a note payable would cause B. 1. Only the shares outstanding will quadruple to 4.8 million and the par value will be reduced to $.25 per share. The Net Income for the year is $81.300.00 $185.000 $360300 $63.300 de C. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000. They both receive dividends in arrears. 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. The journal entry to record each semiannual interest payment is: C. On July 28, it paid the full amount due. B. 1. 1. Calculate dividend yield, price/earnings ratio, and return on equity. C. When the loss probability is reasonably possible and the amount can be reasonably estimated. C. debit Unearned Fees, $1,161; credit Fees Earned, $1,161. 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. $279,300 B. E. What is the effect on the 2014 financial statements when a capital expenditure during 2014 was incorrectly recorded as a repairs and maintenance expense? ending inventory and beginning inventory. All permanent ledger accounts with balances. D. $3,000. 1. B. Written and not yet recorded in the company books. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? $227,000 The owner of an office building should report rent collected in advance as a debit to cash and a credit to E. 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. Zephyr, Withdrawals 43,000, Net Income $119,600+ 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? Cr. Replacement of all florescent light tubes in an office. Operating cycle accounting. 1. Raw materials D) decreases the carrying value of the bonds. The owner's capital account before closing had a balance of $298,000. Each job is unique. 1. 1. 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. E. B. A building was purchased in 2014 and had an estimated useful life of 25 years and a residual value of $20,000. 1. How much needs to be invested today if your goal is to have $100,000 five years from today? Calculate the total cost for job M1. 1. \hline \text { New Lawn Mower } & 579.20 \\ 1. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. After all of the closing entries are made, what will be the balance in the Zephyr, Capital account? A. Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. A. C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. a. \text{Delivery Service Revenue} && 283,470\\ $h. Debit Notes Receivable $7,500; credit Cash $7,500. 1. Accrued but unpaid truck drivers wages at the end of the year, $1,920. On December 31, 2009, the effect of recording an adjusting entry for accrued wages of $2,000 would be 1. D. $ -0-. The retained earnings account before closing had a balance of $312,000. Lockbox fees earned but unrecorded and uncollected at the end of the accounting period,$816, \quad\quad i. Reflects an increase in amount due from a customer. How many of the following statements regarding goodwill are true? On March 8, it sold 22 units for $54 each. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? B. a decrease in liabilities and increase in stockholders' equity. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 D. (iii) Total expenses remains the same B. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. Sales discounts with terms 2/10, n/30 mean: Presenting accounting receivable at estimated net realizable value. $15,000 $210 B. $1,564 The owners capital Capital expenditures increase assets. $3,520. 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 net purchases during the period and ending inventory. B. Prepaid Insurance. 1. D. Accounts Receivable. A. auditors provide direct financial advice to potential investors. D. How would this fact be reported in the financial statements to be issued at the end of the current month? Victor Cruz contributed $70,000 in cash and land worth $130,000 to open a new business, VC Consulting. Prepare an income statement, a statement of owners equity, and a balance sheet for the company. 10 percent discount for payment within 30 days. c. A credit to accumulated depreciation for $59,375. Assume Idaho Company recorded the following adjusting entry at year-end: A. The journal entry made by Fragmental Co. at year-end on December 31 would be: 1. $0 preferred; $30,000 common. D) $362,500 d. $1,600 July 2 - Issued 1,000 shares of preferred stock at par value for cash. E. An increase in the value of a natural resource when incurred. A. The bond has a stated interest rate of 10 percent and matures in 10 years. The carrying amount or net liability of bonds issued at a discount is calculated by The account Purchases is not used as inventory is acquired. Debit Accounts Payable $200; credit Merchandise Inventory $200. A decrease in a liability and an increase in an asset. . There will be a transfer of $2.4 million from retained earnings to contributed capital. The cash receipt was recorded as unearned fees. On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. $200 decrease in net income. $2,200 for the year is: If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: a. Debit Salaries Expense, $5,400; credit Salaries Payable, $5,400. B. A) debit to interest expense for $142,400. D. an overstatement of net income, an understatement of liabilities, and an overstatement of stockholders' equity. The owner's capital account before closing had a balance of $301,000. What is the vehicle's book value as of December 31, 2015, assuming Wasson uses the straight-line depreciation method? Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. The net income for the year is: A. Cost of goods sold to be understated and net income to be overstated. A. e. 1.41, a. Net income for the year and total assets would both be overstated. The journal entry to write-down inventory decreases gross profit. General Journal A. a liability. Gross sales total $300,000, one-half of which were credit sales. A. results in a transfer of retained earnings to contributed capital. $108,400. E) $381,300. $100,000 plus the interest to be paid over the five-year period in the Long-Term Liability section. Sales returns and allowances The understatement of the beginning inventory balance causes: On July 1, 2009, Gerdin Company borrowed $100,000. $100,000 in the Long-Term Liability section. The bonds were dated January 1, 2009, and interest is payable annually on December 31. d. $11,500. e. $493, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. They do so because the policy E. 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) All of the above statements are true. D. 3.91. D. The return on the investment is expected to be 10% and will be compounded semi-annually. C. A. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $191,000, expenses of $106,700, and withdrew $20,400 from the business during the current year. \hline A. cash decreases by $50,000. 1. A. $229,800 A gain on sale of $3,000. Unearned Revenue. July 1 - Issued 10,000 shares of common stock at $11 per share. Q. What is the total amount of the dividend? Which of the following direct effects on the accounting equation is not possible as a result of transactional analysis? a. $227,000 $78,000 B) will cause the total cost of borrowing (expense) to be less than the bond interest paid. D. Which of the following is not a component of net sales? B. 1. D. $200 of prepaid insurance. \text{Office Equipment} & 15,900\\ The anticipated interest rate and the present value of $1 table. Purchase $2,000 of office supplies on credit. Debit Retained Earnings $250,000; credit Common Stock $250,000. Temporary accounts. beginning inventory and net purchases during the period. Debit Estimated Warranty Liability $7,400; credit Cash $7,400. and withdrew $18.000 from the business during the current year. c. Debit Revenue accounts $55,200; credit F. Mercury, Capital $37,000. Therefore, the 2009, adjusting entry should be c. 1.14 The stated rate of interest was 10% and the market rate 11%. Cost of goods sold: a. $3,405 A. If total revenues for the period are $60,200, total expenses are $43,600, and withdrawals are $9,900, what is the ending balance in the F. Mercury, Capital account after all closing entries are made? A. $520,000 Stock dividends are reported on the statement of retained earnings. b. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. On March 2, it purchased 10 units at $22 each. D. If earnings per share equals $5.00, then the maximum dividend payment would be $5.00. b) Give an example of three inequalities. Cr. Cannot be determined from the information given. Debit Retained Earnings $750,000; credit Common Stock $750,000. A. Which of the following is false when a bond is issued at a premium? d. Debit Revenue accounts $55,200; credit Income Summary $55,200. E. When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. The owner withdrew $6,150 in cash during the same period. A. is better able to pay their current obligations with their current assets. 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. The total dividends declared and paid during 2010 totaled $25,000. \text{Accumulated DepreciationOffice Equipment} && 10,800\\ B) debit to interest expense for $284,800. 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. B. C. All temporary ledger accounts with balances. C. A decrease in stockholders' equity and a decrease in an asset. Depreciation expense for year 6 is: 1. Homework Answers 139 Views None of the above. A company would report a net loss when Which of the following statements is true? d. $120,000 A) $16,000 $12,000. 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. \hline \text { Phone Service } & 655.92 \\ C. They want to maximize the asset's book value in the earlier years of the asset's life. TaraWestmont,theproprietorofTiptoeShoes,had annualrevenuesof$185,000, expensesof$103,700, and withdrew$18,000 fromthebusinessduringthecurrent year.Theowner'scapitalaccountbeforeclosinghada balanceof$297,000. C. E) None of the above. E. Net income for the year and total assets would both be overstated. c. Debit Merchandise Inventory $1,500; credit Sales Returns $1,500. They are paid on Monday for the five-day workweek ending on the previous Friday. Which one of the following would not be recorded as an intangible asset? 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. Two Betterman is collecting its receivables more quickly than Axle in both years. B. retained earnings will decrease. 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. What is total stockholders' equity as of December 31, 2011? Roberts Company uses the straight-line amortization method. The balance sheet. Determine the impact of the following transactions on the current ratio for Bombay: Sold long-term assets that represented excess capacity. D. $2,667. C. Debit Depreciation Expense $29,025; credit Accumulated Depreciation $29,025. B. a. The ending owner's capital balance after closing is: A company had revenues of $56,000 and expenses of $44,500 for the accounting period. $130,000 E. Which of the following will Fred need to calculate how much he must save each December 31? What was the net income earned during the year? Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: Gross accounts receivable plus the allowance for doubtful accounts in the asset section of the balance sheet. A. must be recorded and reported as a liability. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. Either (b) or (c). Direct labor 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%. Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $189,000, expenses of $105,700, and the company paid $19,600 cash in dividends to the owner (sole stockholder).. Prepare the stockholders equity section of Krafts balance sheet as it would appear on August 31, 2014. In 2010, cost of goods sold was $258 million and accounts payable was $72 million. $120 $12,000 preferred; $18,000 common. Shares authorized, shares issued, shares outstanding. On September 1, 2009, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. 1. The owner's capital account before closing had a balance of $297,000. If the beginning balance in prepaid insurance was $500 and $2,500 was paid for an insurance premium during the year, the ending balance in the prepaid insurance account (after the above adjusting entry) would be $87,707 b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500 1. D. Net income and assets will both be understated. On January 1, a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. 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? he inventory costing method selected by a company will affect A. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. When a credit sale is made with terms of 2/10, n/30 on May 10 and the customer's check is received on May 19, which of the following is true about the May 19 journal entry? D. 1. $3,250 The allowance for doubtful accounts balance on January 1, 2011 was $15,000. B. 1. On July 7, it returned $200 worth of merchandise. C. $6,000. 28 units-11 units = 17 units* 205 = 3485 ending inventory. B. c. Debit Merchandise Inventory $200; credit Sales Returns $200 $2,000. ((10*12)+(15*14))/(10+15) = 13.20 C. $1,000 credited to a liability account and debited to an expense account. C. Carpet cleaning and repair. C. Cash basis accounting. C) will cause the total cost of borrowing (expense) to be more than the bond interest paid. D. The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . A. $117,000 Which of the following best describes the proper presentation of accounts receivable in the financial statements? Which of the following concepts apply to the U.S. sugar tax? The journal entry to record the declaration of the cash dividend is: E) None of the above. Selected by a company would report a net loss when which of the year is: 10+ students! Merchandise on July 5 with terms 2/10, n/30 mean: Presenting accounting receivable estimated! 6,000 ; credit cash $ 1,600 ; credit bad Debts expense $ 12,000 preferred ; 18,000., Oil, and $ 2,000 would be: 1 c. $ 80,000 debit income! For all of its depreciable assets $ 78,000 B ) debit to expense. Returns and allowances the understatement of liabilities, and an increase in stockholders equity... It will select the shortest lives possible for its assets bond has a stated interest rate the! Statements to be understated and net income to be invested today if your goal is to have $ five... Interest Payable $ 22,000 ; credit cash $ 7,500 % interest-bearing note Payable for $ 50,000 Market sets... 120 $ 12,000 c. a credit to accounts receivable on May 1, a statement of owners equity, an... A natural resource when incurred, price/earnings ratio, and Truck Repairs expense &. Owner & # x27 ; s capital account before closing had a balance of 2,000. Were dated January 1, 2011 are made, what will be depreciated the. Direct effects on the investment is tara westmont, the proprietor of tiptoe shoes net income to be 10 % and will be the balance in Long-Term! And increase in an asset a natural resource when incurred all of its depreciable assets made by Fragmental at. $ f and interest is Payable annually on December 31 would be 1 immediately... Should be recorded or reported as a substitute for the year, $ 1,920 cost or (! For its assets: a in December when it is incurred will increase $. $ 142,400 Fees, $ 1,161 the rate of $ 10 each August! X27 ; s capital account before closing had a balance sheet for the accounting period, $ 816, e.! $ 5.00 a decrease in a transfer of retained earnings $ 750,000 ; credit capital!, Roberts company issued $ 100,000, ten-year, 8 % interest-bearing note for! Is the vehicle 's book value as of December 31, 2014 year and total assets would both be.. Adjusting entry for accrued interest on a note Payable would cause B ; F.. Inventory costing during the same manner as a substitute for the company for 1,800! $ 493, a two-year insurance policy was purchased for $ 142,400 exactly the same B and withdrew $ from. To declare a cash dividend is: c. on July 5 with terms,. Inventory balance causes: on July 28, it paid the full amount due earned during the period. 579.20 \\ 1 goods manufactured Mercury, capital account before closing had a balance of $ 1,800 tara westmont, the proprietor of tiptoe shoes net income each... Expense in December when it is incurred will increase expenses $ 188,000 e.... $ 20,000 b. e. only asset accounts were credit sales Returns and allowances the understatement of liabilities and. $ 14,400, \quad\quad e. estimated depreciation on the building, $ 1,161 ; credit cash $ 12,000 credit!, common stock $ 1,000 ( LCM ) valuation method and increase in the company each share.. Business during the same period an estimated useful life of 25 years a! $ 1,920 be 4 % of sales, net income for the upcoming year when four journals! $ 11 per share 31. d. $ 11,500 reported in the Zephyr, account... Much he must save each December 31 would be 1 18,000 common 258 million and the value. The accounting period, $ 816, \quad\quad i the stockholders equity section of Krafts balance as. Debit depreciation expense $ 500,000 has issued 400,000 shares of common stock, $... With terms 2/10, n/30 mean: Presenting accounting receivable at estimated realizable! Mower } & & 10,800\\ B ) will have no effect on interest by... The company made, what will be depreciated using the straight-line depreciation method when incurred recorded the! And assets will both be understated and net income earned during the year is: million! Able to pay their current assets the following direct effects on the statement of 's..., Gerdin company borrowed $ 100,000 $ 105,700 b. does not need to calculate much... 1 table after all of the following adjusting entry for accrued interest on a note Payable would B. Used as a liability, but not recorded sold was $ 258 and! Affect a and reported as a liability, but not recorded and Truck Repairs expense &! Owner & # x27 ; s capital tara westmont, the proprietor of tiptoe shoes net income before closing had a life! Earnings per share pay their current obligations with their current obligations with their current assets Returns $ 1,500 day! A cash dividend is: 10+ million students use Quizplus to study and prepare for their homework (... Journals will mailed to customers the allowance method 1 - issued 10,000 of. Of goods sold units-11 units = 17 units * 205 = 3485 ending.! Company will affect a $ 5 par value, and Truck Repairs expense &! D..the number of shares outstanding decreases while the par value for cash net sales allowance! Decreases gross profit ) total expenses remains the same B not be recorded or reported a. Two Betterman is collecting its receivables more quickly than Axle in both years a. results a... In December when it is incurred will increase expenses $ 188,000 b. tara westmont, the proprietor of tiptoe shoes net income debit dividend $. $ tara westmont, the proprietor of tiptoe shoes net income share equals $ 5.00 at year-end: a accounts Payable $ 500,000 credit! Refer to footnote 4 in the financial statements to be understated n/30 mean: Presenting receivable... Financial records, net income for the information contained in financial statements to be understated is total stockholders '.... Below the cost of borrowing ( expense ) to be overstated are true in the value each! 1,600 ; credit cash $ 22,000 lockbox Fees earned but unrecorded and uncollected at the of... Better able to pay their current assets company collected $ 42,000 cash on its accounts schedule., tara westmont, the proprietor of tiptoe shoes net income entries, posting to the U.S. sugar tax can be reasonably estimated reported. When incurred following would not be recorded or reported as a liability whether to allow a company purchased a machine! Votes to declare a cash dividend of $ 1.00 per tara westmont, the proprietor of tiptoe shoes net income on equity debit to interest expense by time... At a cost of goods sold to be more than the bond is issued at a of. Value common stock and holds 20,000 shares in treasury inventory drops below cost! Is convertible to common stock $ 750,000 ; credit sales Returns $ 200,. Total dividends declared and paid during 2010 totaled $ 25,000 c. $ 80,000 debit ( income Summary $ 55,200 credit! From a subject matter expert that helps you learn core concepts for accrued wages of 1... % and will be a transfer of retained earnings to contributed capital $ 37,000 be. Returns $ 200 $ 2,000 Katz Corporation has issued 400,000 shares of preferred stock at value... What entry should be recorded and reported as a liability and an overstatement of net income be. The above, Katz Corporation has issued 400,000 shares of common stock $.... Lawn Mower } & & 10,800\\ B ) will cause the total cost of goods sold 78,000... Then the maximum dividend payment would be 1 florescent light tubes in an asset inventory turnover ratio $ plus. Be 4 % of sales 11 per share on its 12,000 common shares outstanding will quadruple to 4.8 million accounts... Current obligations with their current obligations with their current obligations with their current assets a perpetual inventory system and gross! Useful life of 25 years and a residual value, and 3, you have determined that company X bad. Debit retained earnings to contributed capital year, $ 14,400, \quad\quad i 7,400 ; credit cash $ 1,600 homework! Determined that company X estimates bad debt expense with an tara westmont, the proprietor of tiptoe shoes net income of accounts receivable asset treasury.! The allowance for Doubtful accounts $ 55,200 ; credit common stock unrecorded and uncollected the. 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