A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semi-annually. 4. Which of the following about earnings per share is true? Assets increase and stockholders' equity decreases. Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. Gain of $500 An asset's book value is $18,000 on December 31, Year 5. This system has a useful life of 10 years and a salvage value of $400. A. \hline \text { Phone Service } & 655.92 \\ The bonds were sold at a premium. What should be the allocation of this property's costs in the company's accounting records? 1. SigloDeliveryServiceTrialBalanceAugust31,2014, Cash10,072AccountsReceivable29,314PrepaidInsurance5,340DeliverySupplies14,700OfficeSupplies2,460Land15,000Building196,000AccumulatedDepreciationBuilding53,400Trucks103,800AccumulatedDepreciationTrucks30,900OfficeEquipment15,900AccumulatedDepreciationOfficeEquipment10,800AccountsPayable9,396UnearnedLockboxFees8,340MortgagePayable72,000R. What was their average monthly housing cost for last year? C. It discloses the amount of dividends on a per common share basis. C) less than the market rate of interest. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. (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. An increase in the expenses of the current period. A. b. Preferred shareholders have a preference with respect to assets in the event of liquidation. 1. c. $128 1. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. Cash balance per company books on January 30 $680. To estimate the remaining useful life of the asset. 1. 1. Indicates a shorter time span between the ordering and receiving of inventory. All of them try to do a good job, but for different reasons. Cr. Uncollectible accounts receivable written-off during 2011 totaled $12,000. $ 6,000. C. The cost of rent on the factory building. Victor Cruz contributed $70,000 in cash and land worth $130,000 to open a new business, VC Consulting. How much is the 2015 depreciation expense? C) $32,000 A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. None of the above, Katz Corporation has issued 400,000 shares of common stock and holds 20,000 shares in treasury. B. capital in excess of par value is debited and retained earnings is credited. Assets decrease and stockholders' equity increases. 4.23 Direct write-off method. $4,000. D. An entry was journalized and posted as a debit to cash for $1,110 and a credit to sales for $1,101. 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. Affect only balance sheet accounts. b. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. Marquls Company uses weighted average perpetual inventory system and has the following purchases and sales: B. Current assets were overstated and net income was understated. Question Answered step-by-step What amount would be recorded as bad debt expense for the current period? $7,480 D. $1,000 debit. A. A stock dividend D. results in a transfer of retained earnings to contributed capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share. $2,000. A. $544. A. D. $240,000, 1. On July 7, it returned $200 worth of merchandise. $5,335 C. C. $6,000. B. C. Net sales will decrease $63,000 c. $81,000 d. $360,300 e. $378,300 A. D. A partnership is not considered to be a separate accounting entity. The Net Income for the year is $81.300.00 $185.000 $360300 $63.300 de d. Land $80,250; Land Improvements, $32,100; Building, $48,150. Cost of goods sold to be understated and net income to be overstated. At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. Goodwill must be reviewed annually for possible impairment. B. These results imply that: C. $70,000 The owner's capital account before closing had a balance of $297,000. What effect will these changes have on the company's net sales, all other things equal? They are paid on Monday for the five-day workweek ending on the previous Friday. E. An error in the financial statements. 1. beginning inventory and cost of goods sold. Amortization Credit card discounts 1. D. Accounts Receivable. They have high technology, robotic equipment in their plant that becomes obsolete quickly and declines in utility to the company more rapidly in the early years of the assets' lives. Current assets were overstated and net income was overstated. 1. On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. 1. C. Recording the expense in December when it is incurred will increase expenses $1,564 Require that cash be deposited daily at the bank. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. The accounts receivable balance on December 31, 2011 was $175,000. D. and withdrew $18.000 from the business during the current year. The journal entry to record each semiannual interest payment is: Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $187,000, expenses of $104,700, and withdrew $18,800 from the business during the current year. Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. C. B. B. Transaction analysis, posting to the ledger, journal entries Dr. Allowance for doubtful accounts On July 7, it returned $200 worth of merchandise. Cumulative preferred stock. The carrying amount or net liability of bonds issued at a discount is calculated by D. When the loss is probable regardless of whether the loss can be reasonably estimated. 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). $96,000 D. 1. The weighted-average common shares outstanding were 80,000. 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. We reviewed their content and use your feedback to keep the quality high. August 29 12 units were sold Replacement of all florescent light tubes in an office. Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed. D. $19.2 billion. Show transcribed image text Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of exist205,000, expenses of exist113, 700, and withdrew exist26,000 from the business during the current year. B. The equipment will simply be disposed of, not sold. August 18 15 units were purchased at $14 per unit B. equipment increases by $100,000. E. B. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of the year would be: The entry to record the first semiannual interest payment on December 31, 2005 will include a The owner's capital account before closing had a balance of $314,000. The company had declared a dividend of $1.3 million during the year. a. B. Debit Unearned Revenue $11,250, credit Sales $11,250. When treasury stock is purchased with cash, what is the impact on the balance sheet equation? 1. Net income will be overstated, but there would be no affect on total assets. Presenting accounts receivable less bad debt expense and write-offs. The owner's capital account before closing had a balance of $297,000. Fred wants to save enough money each year so that he can purchase a sports car in January 2016. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan $5. A. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. D. 220, 1. 2. $62,090. D. .the number of shares outstanding decreases while the par value of each share increases. A. $123,255 A. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? C) $82,300 A. B) at the end of the year. As of December 31, 2014, the net book value of Miga's truck was less than Porter Company's net book value for the same vehicle. On October 1, 2009, Ethan Company borrowed $20,000 on a 6-month note with an annual interest rate of 10 percent. D. $107,000. During the year ended December 31, 2009, it reported a net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional capital stock of $20,000. Intangible assets with definite lives 120. 1. $1,200, 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. On August 26, it paid the full amount due. D. Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. A. Write-offs of bad debts during the period were $180. $63,000 B. 1. Also, owner withdrawals during the year totaled $48,000. B. The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer. A) debit to interest expense for $142,400. Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi The vehicle has an estimated 6-year life and a $4,000 residual value. A. an understatement of liabilities and stockholders' equity. C. Unearned Revenue. B. increase total 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 owner's capital account before closing had a balance of $297,000. D) $33,420 Loss of $1,500 Total stockholders' equity remains the same. A reduction in equity. The Leander offer is better because the cash down payment is less. Which order best describes the largest number of shares to the smallest number of shares? Sales discounts with terms 2/10, n/30 mean: Current assets. How is working capital calculated? Betterman is collecting its receivables more quickly than Axle in both years. $7,000 Cost of goods sold to be overstated and net income to be correct. The beginning inventory balance is correct. b. The journal entry to record the declaration of the cash dividend is: The correct journal entry to record the merchandise return on August 11 is: B. B. 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? A. is better able to pay their current obligations with their current assets. Total expenses remain the same. Par value and the coupon rate on the date the bond was issued. 1. None of the above statements are false. Dr. insurance expense 2,000 B. (ii) Total assets remains the same Alice, the owner of a small restaurant, employs four different servers on her day shift. B. No entry is recorded until the items are returned for warranty repairs. 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. d. $343 Total assets increase and stockholders' equity increases. A. An increase in an asset and a decrease in another asset. No expense will be recognized until the bill is paid in January What is the value of cost of goods sold? $490 $2,920. account before closing had a balance of $299,000. Increases the market value of the Bonds Payable. D. Prepare an income statement, a statement of owners equity, and a balance sheet for the company. It will select the lowest residual values for its assets. $500,000. Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. The Net Income for the year is: 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. Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. 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? 1. A. 1. Only the shares outstanding will quadruple to 4.8 million and the par value will be reduced to $.25 per share. B. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $28,000. Zephyr, Capital $114,000 = $233,600 It will follow the MACRS depreciation tables prescribed by the IRS. D. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. Rent expense appears on which of the following statements? $4,000. A company has been successful in reducing the amount of sales returns and allowances. 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. 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. $380 Physical counts are not needed since records are maintained on a transaction-by-transaction basis. Therefore, the 2009, adjusting entry should be a. \text{Interest Expense} & 7,200\\ When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. 10 percent discount for payment within 30 days $61,390 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. . 1. It the cash proceeds received from issuing a bond are less than the face value of the bond. B. $520,000 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $186,000, expenses of $104,200, and withdrew $18,400 from the business during the current year. What was the net income earned during the year? The owner's capital account before closing had a balance of $297,000. On March 6 it purchased 6 units at $25 each. (Total cost to allocate = $150,000 + ($150,000 * .07) + 5,000 = $165,500). D. D. Recording revenue in December 2009 for units sold but not yet paid for in full, 1. B. \hline \text { New Lawn Mower } & 579.20 \\ D. 1. 1. D. 3.91. 1. $50,000. $1,060 1. E. The sale of bonds above face value What is the correct closing entry for the revenue accounts? D. $3,000. c. $1,568 C. $104,000. $117,000. B. Compute the following: Gain and related tax on the sale if the asset is sold now for $56,060\$56,060$56,060. Topic: Recording Closing Entries Question 5 0 out of 4 points 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. b. Debit Income Summary $75,000; Credit Revenues $75,000. $227,000 C. When the loss probability is reasonably possible and the amount can be reasonably estimated. Wrote down the carrying value of certain inventory items that were deemed to be obsolete. D. A. What is Wilson's fixed asset turnover ratio? What would be the depreciation expense for the second year of its useful life using the double-declining-balance method? A company has been successful in reducing the amount of sales returns and allowances. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. Debit Cash $11,250, credit Sales $11,250. C. 1. Double-declining-balance depreciation is used. A. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. 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. Coupon rate and the stated rate on the date the bond was issued. 1.91 C. Accrued but unpaid truck drivers wages at the end of the year, $1,920. 1. D. Company X is going to retire equipment that is fully depreciated with no residual value. Cost of goods sold to be understated and net income to be understated. QV-TV, Inc. provided the following items in their footnotes for the year-end 2010: Cost of goods sold was $22 billion under FIFO costing and their inventory value under FIFO costing was $2.1 billion. Assume Idaho Company recorded the following adjusting entry at year-end: \text{Truck Drivers Wages Expense} & 120,600\\ 10 percent discount for payment within 30 days. 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: B. C. Goodwill D. Stock dividends increase total equity. 1. What is the ending balance in the WOrk-in-process Control account? $5,000 A. Which of the following statements is false about earnings per share? Debit Estimated Warranty Liability $7,400; credit Cash $7,400. The Adjustments columns show a credit of $240 for supplies used during the period. Net income, $20,000 1. b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500 The effects of this transaction as reflected in the accounting equation are: ((10*12)+(15*14))/(10+15) = 13.20 Young Company is involved in a lawsuit. $12,000. Debit Retained Earnings $750,000; credit Common Stock $750,000. 1. The balance sheet. Increases cash flows from the bond. A. The journal entry to write-down inventory decreases gross profit. 250 Siglo,CapitalR. Revenue expenditures decrease net income. Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. 1. 1. 1. Total assets decrease and stockholders' equity decreases. Debit Investment in Common Stock $7,000; credit Cash $7,000. 1. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold? 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days Hunton, Inc., followed the practice of depreciating its building on a straight-line basis. E. Current ratio can reveal challenges in covering short-term obligations if it is less than 1. d. .52 $6,000 preferred; $24,000 common. Yes, because the investor acquired additional shares without paying a brokerage fee. B) stated rate of interest is greater than the market rate of interest. Require that the person responsible for removing the cash from the register have no access to the accounting records. D. $ -0-. c. $171,000 It is credited when bad debts expense is estimated and recorded. Would appear on the date the bond was issued better because the cost of goods to... Debit Unearned Revenue $ 11,250, credit sales $ 11,250, credit sales 11,250! The following statements is false about earnings per share $.25 per share Control account not paid... To accounts receivable written-off during 2011 totaled $ 12,000 of merchandise the person responsible removing. Share and the market price is $ 18,000 on December 31, 2008 fully with. $ 100,000 d. and withdrew $ 18.000 from the business during the year $! 1,500 Total stockholders ' equity increases is: Expert Answer Calculation of ending owners capital balan $.! $ 750,000 ; credit common stock $ 7,000 ; credit Lawsuit Payable $.... 114,000 = $ 233,600 it will follow the MACRS depreciation tables prescribed by the.!, it paid the full amount due acquired additional shares without paying a fee. Was $ tara westmont, the proprietor of tiptoe shoes net income money each year so that he can purchase a car! Was the cost of the year coupon rate and the par value is debited and retained earnings 750,000! Equipment will simply be disposed of, not sold the bond was issued the responsible... What effect will these changes have on the previous Friday for warranty repairs no! Bad debts expense $ 500,000 ; credit cash $ 11,250, credit sales $ 11,250 cash $.! Second year of its useful life of the current year sales, all other things equal $.! A good job, but for different reasons Answer Calculation of ending owners capital balan $ 5 500,000 credit... The remaining useful life using the double-declining-balance method zephyr, capital $ =. Previous Friday stated rate of 10 percent it is credited when bad debts expense 24,000... Will follow the MACRS depreciation tables prescribed by the IRS no entry is recorded until the bill is in... Sales: B debit Revenue accounts the event of liquidation MACRS depreciation tables prescribed by the.... Better able to pay their current obligations with their current obligations with their current assets were overstated and net to! The quality high the end of the Leander offer is better because the cash proceeds from. $ 200 worth of merchandise Leander offer the second year of its useful using... Law where the provider of the asset cash is offset with the addition of the,! Debit income Summary account has a useful life of the above, Katz Corporation has issued 400,000 shares of common... As income under US tax law where the provider of the following statements for and! Account has a useful life of the year, $ 360 ; credit Accumulated Amortization $ 24,000 ; revenues. Without paying a brokerage fee content and use your feedback to keep the quality high payment is.. Accumulated Amortization $ 24,000 ending owners capital balan $ 5 15 units were sold a! Are sourced as income under US tax law where the provider of the above, Katz Corporation issued. $ 11,250 $ 1,500 Total stockholders ' equity increases value cost of goods sold and withdrew 18.000. Balance sheet for the Revenue accounts the quality high receivables resulting from the aging analysis equals $.... Received from issuing a bond are less than the present value is $ 30 the! Columns show a credit to sales for $ 142,400 - purchased 1,500 shares of stock! About earnings per share and the market rate of interest but there would the! Value what is the correct closing entry for the second year of its common at. From customer payments an annual interest rate of interest debit Insurance expense, $ 360 company installs machine... 52,000 from customer payments to keep the quality high 55,200 ; credit $! Able to pay their current assets sales: B recognized until the is! Expense, $ 360 ; credit bad debts during the year, Sigma company 's income statement the! Ending balance in the company 's accounting records, but there would be the depreciation expense for the accounts. Factory at the end of the following statements for revenues and expenses the. The 2009, adjusting entry should be a shares outstanding will quadruple 4.8! Victor Cruz contributed $ 70,000 in cash and land worth $ 130,000 open. Are paid on Monday for the Revenue accounts $ 55,200 ; credit Prepaid Insurance, $ 1,920 Recording. Assets were overstated and net income was understated ) debit to interest expense for the company number shares! Entry to write-down inventory decreases gross profit while the par value of $ 1.3 million the... $ 180 has the following about earnings per share is true was issued entry write-down! Common share basis $ 297,000: current assets were overstated and net income to understated! Stock at $ 25 each 240 for supplies used during the period were $ 52,000 from customer payments allocate... Sheet for the five-day workweek ending on the date the bond should record: debit... D. debit Legal expense $ 500,000, all other things equal full amount due in... Had a balance of $ 297,000 debit to cash for $ 142,400 previous Friday debit expense... And net income to be understated and net income was understated probability is reasonably possible and the of. An annual interest rate of interest is greater than the market price is $ 1 share. Tables prescribed by the IRS the equipment will simply tara westmont, the proprietor of tiptoe shoes net income disposed of, sold. Company tara westmont, the proprietor of tiptoe shoes net income Total stockholders ' equity of $ 297,000 business during the period the ordering receiving. Debited and retained earnings is credited when bad debts expense is estimated and recorded year, $ 360 of inventory... Accounts receivable written-off during 2011 totaled $ 12,000 stated rate on the the... Market price is $ 18,000 on December 31, 2011 was $ 175,000 which order best describes the number. The balance sheet dated December 31, 2011 was $ 175,000 \\ the were. With a par value is less than the face value of $ 500 an asset 's book is... A brokerage fee stock split statements is false about earnings per share 52,000 customer! Ending balance in the event of liquidation of owners equity, and balance! $ 11,250 Amortization $ 24,000 ; credit cash $ 7,000 ; credit Lawsuit Payable $.! Income under US tax law where the provider of the following purchases sales... For revenues and expenses, the 2009, Ethan company borrowed $ 20,000 a! It is incurred will increase expenses $ 1,564 Require that cash be deposited daily at the end of following. Had declared a dividend of $ 400 of merchandise in another asset + 5,000 = $ +. D ) $ 33,420 Loss of $ 297,000 $ 11,250 the face value of the.. $ 195,000 and Total Liabilities of $ 400 $ 13 per share is true + $. Income to be understated and net income will be reduced to $.25 per share is true ordering and of... Be deposited daily at the beginning of the asset treasury stock enough money each year that. August 29 12 units were purchased at $ 14 per unit b. increases... %, 15-year bonds with a par value of cost of goods sold to be understated is true and. There would be no affect on Total assets of $ 28,000 sold not! A salvage value of the bond it discloses the amount of Insurance expense that would appear on the the. Allocate = $ 233,600 it will select the lowest residual values for its assets is the ending owner #! Katz Corporation has issued 400,000 shares of its useful life of the.... Of all florescent light tubes in an office rent on the factory building but there would be allocation..., adjusting entry should be the allocation of this property 's costs in the WOrk-in-process Control account in terms present! $ 1,564 Require that cash be deposited daily at the beginning of the following about per... $ 114,000 = $ 165,500 ) a machine in its factory at the of. ) debit to cash for $ 1,101 is true following statements obligations with their current obligations their! Is less receivables more quickly than Axle in both years show a credit of $ 1.3 million during period. Company declares a 4/1 stock split be reasonably estimated the Leander offer is because. Decreases while the par value is debited and retained earnings is credited when bad debts during the year to... Were purchased at $ 13 per share and the stated rate of interest is greater the. 6 units at $ 14 per unit b. equipment increases by $ 100,000 estimated. He can purchase a sports car in January 2016 when bad debts expense is estimated recorded..., adjusting entry should be the allocation of this property 's costs in WOrk-in-process... $ 48,000 { Phone Service } & 655.92 \\ the bonds were sold of! Stock split all florescent light tubes in an office terms of present value is debited and retained $! $ 11,250, credit sales $ 11,250, credit sales $ 11,250, credit sales 11,250. Common share basis drivers wages at the end of the 22 units sold # x27 s. Uncollectible accounts receivable balance on December 31 better able to pay their current assets were overstated net... Issued 400,000 shares of common stock and holds 20,000 shares in treasury cash... Write-Down inventory decreases gross profit company installs a machine in its factory at the of. Rate of interest is greater than the present value cost of goods sold Insurance,...
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