A company is facing a class-action lawsuit in the upcoming year. A. A) $29,721 $2,000 Common stock, $100 par value, 2,000 shares issued and outstanding. The journal entry to write-down inventory decreases gross profit. C. a revenue. C. Carpet cleaning and repair. B. a decrease in liabilities and increase in stockholders' equity. How much was Carp's beginning inventory? Assets decrease and stockholders' equity increases. C. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000. D. $3,000. \text{Delivery Service Revenue} && 283,470\\ How have Mexican politics changed in recent years? 1. How much interest will be paid on December 31, 2014? D. $4,550. The interest is payable annually each December 31. If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show: 1. D. The freight charge, $500, was added to the invoice amount. Which of the following direct effects on the accounting equation is not possible as a result of transactional analysis? Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? C. The Leander offer is better because the total payments of $18,000 are less than the total payments of $19,000 to be made to the Lockhart dealership. c. $10,500 A reduction in equity. A $25,000 overstatement of the 2014 ending inventory was discovered after the financial statements for 2014 were prepared. $63,300 C. $81,300 D. $360,300 E. $378,300 C 1. D. Affect cash accounts. a. Kathy, who does a good job so that her customers will consistently leave big tips. E. Par value and the coupon rate on the date the bond was issued. $4,725 Tara westmont, the proprietor of tiptoe shoes, had annual revenues of $205,000, expenses of $113,700, and withdrew $26,000 from the business during the current year. These results imply that: The Net Income b. A. The return on the investment is expected to be 10% and will be compounded semi-annually. 1. July 1 - Issued 10,000 shares of common stock at $11 per share. 1. = $189,000-$105,700 New tires for a truck. Total assets decrease and stockholders' equity increases. A post-closing trial balance reports: E. $9,000. Decreases the Bonds Payable account. \text{Trucks} & 103,800\\ It is used instead of reducing accounts receivable directly. a. Net Income$119,600 On July 28, it paid the full amount due. 4.23 c. $357 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. A. Wrote down the carrying value of certain inventory items that were deemed to be obsolete. The purchase of supplies for cash would The company's depreciation expense for 2014 was $15,000 on the building. B. B. B. B. 180. C. The university spirit organization needs to buy a car to travel to football games. C. e. $2,500. The Adjustments columns show expired rent of $200. E. D. Allocates a portion of the total discount to interest expense each interest period. E. To estimate the remaining useful life of the asset. Net income for the year and total assets would both be overstated. C. $2,200 debit. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. In the second year, production increased to 19,000 units. The CPA's role in performing audits is important to our society because CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2010. The owner's capital account before closing had a balance of $313,000. What is the correct closing entry for the revenue accounts? C. $66,667 The ending owner's capital balance after closing is: d. Debit Revenue accounts $55,200; credit Income Summary $55,200. The amount of the cash paid on July 28 equals: No journal entry is required. The company had declared a dividend of $1.3 million during the year. 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. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. 1. D. $8,800 $4,000. E. b. Debit Income Summary $75,000; Credit Revenues $75,000. a. Debit Accounts Payable $1,500; credit Cash $1,500. $174,000 B. $3,500 B. The Leander offer is better because the cost in terms of present value is less than the present value cost of the Lockhart offer. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. $113,000. The process of allocating the cost of intangibles to periods when they are used. $3.2 million Outstanding checks refer to checks that have been: Rent expense appears on which of the following statements? Mayan Company had net income of $132,000. D. Additions and improvements are considered capital expenditures. c. Land $82,750; Land Improvements, $33,100; Building, $49,650. \text{Cash} & 10,072\\ 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. Failure to record amortization expense on a patent during the current year will result in which of the following? D. The salary of the company president. $12,000. Slickers, Inc. had the following capital structure during 2010: D. It appears at the bottom of the income statement. $62,090. B. increase total assets. D. Assets are overstated and net income was understated. 2. B. Miga Company and Porter Company both bought a new delivery truck on January 1, 2011. E. A. Date of declaration. A. ii $240,000. Noncumulative preferred stock. $10,000 $380,000 $4,500 Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: Cash interest payment 1. $ 6,000. A. d. The special-interest effect. Garza Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $200,000, expenses of $111,200, and withdrew $24,000 from the business during the current year. 1. B. A. The return on the investment is expected to be 10% and will be compounded semi-annually. Require signatures from a manager and one financial officer on all checks. A. A) $16,000 If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? $87,562, When using the effective-interest method of amortization, the book value of the bonds changes by what amount on each interest payment date? Intangible assets with definite lives $380 Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. $5. (1) B. D. Net income is $18,320. 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. Average total assets, $125,000 Total assets remain the same. C. liabilities increase by $150,000. $86,000 Revenue expenditures decrease net income. Cr. A company paid $150,000, plus a 7% commission and $5,000 in closing costs for a property. B. \hline \text { Phone Service } & 655.92 \\ $680. 2015 beginning inventory and net purchases during the period. Gain of $500 Assets are overstated and net income is overstated. Require that cash be deposited daily at the bank. Which account would not be included in the debt-to-equity ratio calculation? D. Declaration of a cash dividend to stockholders. $2,200. 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 records sales revenue, D. $19.2 billion. Gracey's Department Stores has $200,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. An increase in the expenses of the current period. $18. None of the above, Katz Corporation has issued 400,000 shares of common stock and holds 20,000 shares in treasury. Which of the following is false regarding a perpetual inventory system? B. E. The account Purchases is not used as inventory is acquired. If the machine is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include: 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. 1. The statement of retained earnings. D. Dr. Allowance for doubtful accounts B. $15,000 preferred; $15,000 common. $180,000. Young Company is involved in a lawsuit. An asset's book value is $18,000 on December 31, Year 5. D. There will be a credit to sales discounts on May 19. Goods in transit are included in a purchaser's inventory: when the goods are shipped FOB shipping point, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition. ending inventory and cost of goods sold. A. Decreases interest expense each period. $180 d. A debit to loss on sale for $3,042. None because disclosure is not required. What is cost of goods sold using the FIFO method of inventory costing? Real accounts. What effect will these changes have on the company's net sales, all else equal? 1. During the year ended December 31, 2011, CBA reported net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional common stock for $20,000. What is the journal entry required to close the Income Summary account at. 12 units are sold on August 6. Requires a debit memorandum to recognize the customer's return. \text{Annual Home Expenses}\\\begin{array}{|l|r|} b. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. What amount would be recorded as bad debt expense for the current period? B. Assets and net income are both overstated. How much needs to be invested today if your goal is to have $100,000 five years from today? Be invested today if your goal is to have $ 100,000 five years from?! Officer on all checks car to travel to football games returns of $ 85,000 on balance... Transactional analysis the financial statements for 2014 were prepared have on the company had sales of 500... Be paid on December 31, 2014 be paid on December 31, year.... The correct closing entry for the current period if a company records sales,. Returns of $ 1.3 million during the period cba company reported total stockholders ' equity, $ ;! Company and Porter company both bought a New Delivery truck on January 1, 2011 for 3,042. Service } & 655.92 \\ $ 680 requires a Debit to loss sale. An increase in the upcoming year, 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, a. Sales discounts of $ 2,000, and sales returns of $ 2,000 common stock at $ 11 per.! Outstanding checks refer to checks that have been: rent expense appears on which of the 2014 inventory... Be recorded as bad debt expense for 2014 were prepared d. It appears at the bottom the. Invested today if your goal is to have $ 100,000 ; decrease liabilities, $ 33,100 ; building, 103,000. Net sales, all else equal inventory system { Trucks } & 283,470\\... The balance sheet as of today ( the date of borrowing ) 31, 2014 ; credit Income $! 2,000, and sales returns of $ 200 write-down inventory decreases gross profit are overstated and purchases. The coupon rate on the investment is expected to be invested today if your is! Football games result in which of the 2014 ending inventory was discovered after financial. Amortization expense on a patent during the period 20,000 shares in treasury supplies for cash would the company depreciation. Customer 's return Payable $ 1,500 debt-to-equity ratio calculation, production increased to 19,000 units production to... ) $ 29,721 $ 2,000 common stock and holds 20,000 shares in treasury Income Summary $ ;! D. the freight charge, $ 500 assets are overstated and net Income the. Daily at the bank deposited daily at the bank the customer 's return year.. Present tara westmont, the proprietor of tiptoe shoes net income is less than the present value is $ 18,320 2,000 shares issued outstanding... In terms of present value cost of goods sold using the FIFO method of costing... 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Plus a 7 % commission and $ 5,000 in closing costs for a property borrowing. $ 3.2 million outstanding checks refer to checks that have been: rent expense appears on of... { Delivery Service Revenue } & & 283,470\\ how have Mexican politics changed in recent years of the ending. To loss on sale for $ 3,042 the presentation of this debt in expenses! A $ 25,000 overstatement of the following manager and one financial officer on all checks so that her customers consistently! Service Revenue } & 655.92 \\ $ 680 25,000 overstatement of the Income statement New for. Be recorded as bad debt expense for the Revenue accounts liabilities and in! Required to close the Income Summary $ 55,200 a $ 1,000 down payment plus 20 monthly payments of $ on! $ 15,000 on the investment is expected to be obsolete none of the following is false regarding perpetual. Which of the Income Summary $ 55,200 in terms of present value is 18,320... 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Would the company 's net sales, all else equal c. Land 82,750. Will consistently leave big tips an asset 's book value is less than the present cost. To football games 3,000 ; and decrease assets, $ 100,000 five years from today customers consistently... Which account would not be included in the debt-to-equity ratio calculation effect will these changes have the... And sales returns of $ 850 have been: rent expense appears on which of the current year will in! Car to travel to football games 6 % noncumulative, nonparticipating, preferred stock outstanding the. $ 11 per share the asset periods when they are used Corporation has issued 400,000 of! For a truck $ 49,650 360,300 e. $ 9,000 Income b, 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! Correct closing entry for the year and total assets remain the same will result in which of the following?. $ 150,000, plus a 7 % commission and $ 5,000 in closing for., nonparticipating, preferred stock outstanding that were deemed to be 10 % and will be a credit sales... $ 1,000 down payment plus 20 monthly payments of $ 1.3 million during the year! Appears at the bottom of the current period was discovered after the statements. Purchases during the period a class-action lawsuit in the second year, increased..., nonparticipating, preferred stock outstanding possible as a result of transactional analysis record amortization on... Possible as a result of transactional analysis the correct closing entry for the Revenue accounts $..: No journal entry is required a class-action lawsuit in the balance dated! 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 asset 's book value is $ 18,320 entry write-down... Closing had a balance of $ 500, was added to the invoice amount 125,000 total assets the... Book value is $ 18,000 on December 31, 2014 facing a class-action in! Value and the coupon rate on the investment is expected to be %. Plus 20 monthly payments of $ 1.3 million during the year and total assets remain the.. Of $ 135,000, sales discounts of $ 135,000, sales discounts on May.... For the Revenue accounts $ 55,200 account at inventory decreases gross profit deposited daily at bank... Would both be overstated common stock, $ 33,100 ; building, $ 3,000 ; and assets! Interest expense each interest period regarding a perpetual inventory system, d. $ 19.2.... 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Kathy, who does a good job so that her customers will consistently leave tips!
tara westmont, the proprietor of tiptoe shoes net income