C. $6,000. $113,000. Which of the following statements is incorrect? 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: 100,000-20,000= $80,000. Debit Common Stock $6,000, debit Investment in Common Stock $1,000; credit Cash $7,000. Net income for July was zero and August was $11,500. 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. Treasury stock has no voting, dividend, or liquidation rights. A. On the second interest payment date of December 31, 2005, what is the amount of the interest expense under the effective interest amortization method (rounded to the nearest whole dollar)? Administrative overhead C. Closing accounts. B. Net Income$119,600 Which of the following is an example of an expense that would most likely be capitalized? C. 180. What is the journal entry needed to record the transaction by Jarrett Company? On September 1, 2009, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. \textbf{Trial Balance}\\ Collection of cash from a customer. C. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $28,000. 1. $2,920. Transaction analysis, posting to the ledger, journal entries The ending owner's capital balance after closing is: Multiple Choice $187,000 $82,300 $381,300 $362,500 $63,500 B. There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. 1. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. Net sales will not change. B. The owner's capital account before closing had a balance of $297,000. How much is the 2015 depreciation expense? C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. $8,000 $2,200 $$ Which of the following activities does not violate the revenue recognition principle? (sales - COGS = gross profit) 386000-218000. A. 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 Only the shares outstanding will quadruple to 4.8 million and the par value will be reduced to $.25 per share. Par value and the coupon rate on the date the bond was issued. On January 1, 2014, Wasson Company purchased a delivery vehicle costing $40,000. Cash payments to suppliers were less than current period purchases. Three Using the units-of-production method, what is the book value of the machine at the end of the second year? A. 35. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The charter authorized the issuance of 500,000 shares. B. E. Only asset accounts. It was determined that the replacement cost is $18 per unit. Debit Bond Interest Payable $22,000; credit Cash $22,000. Gross accounts receivable in the asset section of the balance sheet and the allowance for doubtful accounts in the expense section of the income statement. Page 420 When the bond is issued, the market rate of interest is 10 percent. On October 2, it purchased 20 units at $205 each. The Unadjusted Trial Balance columns of a work sheet total $95,300. $470 Explain your answer. $1,060 D) $645,596 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? \hline \text { Internet & Phone Bundle } & 1,198.80 \\ A. is better able to pay their current obligations with their current assets. C. $6,000 What is the net impact on retained earnings? B. a decrease in liabilities and increase in stockholders' equity. An asset was purchased three years ago for $120,000\$120,000$120,000. Q. Each partner is potentially responsible for the debts of the business. At the end of the fiscal year, Siglo Delivery Services trial balance appeared as follows. (ii) Total assets remains the same b. Debit Merchandise Inventory $200; credit Accounts Payable $200. = $83,300 1. b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500 Purchase allowances refer to a price reduction (allowance) granted to a buyer of defective or unacceptable merchandise. 28 units-11 units = 17 units* 205 = 3485 ending inventory. Calculated using the double-declining balance method. The firm is in a 35 percent tax bracket. 1. 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. C. Goodwill Coupon rate and the market rate on the date the bond was issued. Transaction analysis, journal entries, trial balance consumers upwards of 222 billion dollars per year. Eaton Company issued $5 million in bonds. On July 12, it paid the full amount due. 4. Requires a debit memorandum to recognize the customer's return. The journal entry to write-down inventory decreases current assets. B. 1. Sales discounts with terms 2/10, n/30 mean: $220. A. B. The ending owner's capital balance after closing is: $379,000 A) subtracting Discount on Bonds Payable from Bonds Payable. Hull Company reported the following income statement information for 2015: Debit Cash $11,250, credit Sales $11,250. 1. Amortization D. $1,000 debit. $24,000. B. its assets decreased during an accounting period. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. It is credited when bad debts expense is estimated and recorded. The owner's capital account before closing had a balance of $313,000. On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. Reflects an increase in amount due from a customer. When the loss is probable and the amount can be reasonably estimated. A. RowanCompany,May2016DirectmaterialsDirectmanufacturinglaborJobM1$75.000275.000JobM2$56.000209.000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Multiple Choice Debit Income Summary $83,300, credit T. Westmont, Capital $83,300 Debit T. Westmont, Capital $63,700; credit Income Summary $63,700 Debit T. Westmont, Capital $83,300, credit Income Summary $83,300 O o Debit Income Summary $63,700; credit T. Westmont, Capital $63,700 Debit T. Westmont, Capital $301,000; credit Income Summary $301,000. $103,400. D. The journal entry to write-down inventory increases cost of goods sold. A. Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. This system has a useful life of 10 years and a salvage value of $400. 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. D. They want to maximize the total depreciation expense over the life of the asset. 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. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? D. The adjusted cash balance per the books on January 31 is: Which of the following is not a step toward effective internal control over cash? B. . $500,000 $279,300 \text{Delivery Service Revenue} && 283,470\\ On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. (Total cost to allocate = $150,000 + ($150,000 * .07) + 5,000 = $165,500). Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: 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. $2,667. Bank service charges $4,000 Operating cycle accounting. (2089/9421)*365 = 80.9 days. Which of the following statements is correct? Debit Cash $7,500; credit Accounts Payable $7,500. A. The owner's capital account before closing had a balance of $314,000. 1. 3.7908 Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. A. $2,000,000 in the Long-Term Liability section. All of the above are advantages associated with bonds. The weighted-average common shares outstanding were 80,000. 1. Current assets were understated and net income was overstated. B. D. Either (b) or (c), 1. e. A credit to gain on sale for $4,979. $4.89. At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. 1, 2, and 3, You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. $117,000. Yes, because the investor has more shares. When the company mails the first quarterly journal to customers, it should record: B. D. $101,000. How much of the dividend is paid to the common stockholders during 2010 assuming the preferred stock is noncumulative? $180,000. D) credit to interest payable for $320,000. 6.1051 d. Debit Merchandise Inventory $1,500; credit Cash $1,500. Increase of $225,000 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) What was the net income earned during the year? Using the lower of cost or market rule, what amount should be reported on the balance sheet for inventory? What was Landseeker's accounts payable turnover ratio in 2008? The machine has a useful life of 8 years and a residual value of $10,000. 1. d. $20,000 Tara Westmont, the proprietor of Tiptoe Shoes, had annual a. $8,800. E) None of the above is correct. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2008. A. account before closing had a balance of $299,000. However, noncumulative stock's undeclared dividends accumulate each year until paid. d. $130 On July 1, 2005, Zack Corporation issues $4,000,000 of 10-year bonds dated July 1, 2005 for $3,560,000 when the market rate of interest was 8%. B. C. increase liabilities. Revenue expenditures decrease net income. What is total stockholders' equity as of December 31, 2011? \hline \text { Window Repairs } & 580.10 \\ C. Unearned Revenue. What is the amount of the cost of goods sold for this sale? What would be the effect on December's income statement of a utility bill received on December 27, 2009 but which will not be paid until January 10, 2010? \text{Accounts Payable} && 9,396\\ B) subtracting Interest Payable from Bonds Payable. A. None of the above. Revenue expenditures decrease net income. 1. A. net income will decrease. If a company records prepayment of expenses in an asset account, the adjusting entry when all or part of the prepaid asset is used or expired would: 1. d. The special-interest effect. Which statement regarding dividends is false? Does a stock dividend increase an investor's personal wealth immediately? B. Gracey's also has $600,000 of common stock outstanding. Which of the following is an example of an extraordinary repair? On December 31, 2009, Goode paid $103,000 to settle the debt in full. Current amounts owed to various parties excluding suppliers of inventory. It is debited when uncollectible accounts are written off. C. All permanent ledger accounts with balances. The amount of the cash paid on July 8 equals. Increases cash flows from the bond. 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. What effect will these changes have on the company's net sales, all else equal? The carrying value (net liability) of the bonds will equal the market price A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. $113,421. $9,350. Discuss how the transaction below impact the accounting equation. e. $13,750. 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. On July 7, it returned $200 worth of merchandise. D. is less able to pay off their current obligations with their current assets. The company credited Unearned Fees for the amount received and the subscriptions started immediately. 1. Replacement of all florescent light tubes in an office. C. Cash basis accounting. A) is a rare occurrence. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. Current ratio helps to assess a company's ability to pay its debts in the near future. B. $30,000. Which of the following statements does not correctly describe the allowance for doubtful accounts balance? The balance sheet. B. d. Debit Accounts Payable $1,800; credit Cash $1,800. from the business during the current year. Which of the following describes the effect of the inventory error on the 2014 financial statements? D) decreases the carrying value of the bonds. B. B. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000. A. \begin{array}{c}\\ Workings: *Net income for the year= Total R. C. c. $450 $113,000 1. B. retained earnings will decrease. B. decrease assets, $100,000; decrease stockholders' equity, $100,000. Which of the following explains this? A. Leaseholds D. Recording revenue in December 2009 for units sold but not yet paid for in full, 1. The company signed a note payable with interest at 6 percent per year. The anticipated interest rate and the future value of $1 table. Its cost of goods sold equals: $221,500 $380,000 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. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? The market rate on the January 1, 2005, issue date was 10%. The owner's capital account before closing had a balance of $314,000. The owner withdrew $6,150 in cash during the same period. A. C. Gain of $500 Cost of goods sold. B. A. Debit Retained Earnings $250,000; credit Common Stock $250,000. The account Purchases is not used as inventory is acquired. The journal entry to write-down inventory increases cost of goods sold. $5,000 C. B. Cost of goods sold: August 2 10 units were purchased at $12 per unit Cost of goods sold to be overstated and net income to be correct. D. $19.2 billion. An increasing inventory turnover ratio B. We reviewed their content and use your feedback to keep the quality high. E. 2003-2023 Chegg Inc. All rights reserved. C. $21,500 A gain on sale of $12,000. The owner's capital account before closing had a balance of $313,000. Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. An increase in the value of a natural resource when incurred. \text{R. Siglo, Withdrawals} & 30,000\\ When the loss probability is remote and the amount can be reasonably estimated. Par value and the market rate on the date the bond was issued. Net income = Revenues - Expenses $25 D. D. decrease stockholders' equity, $100,000; decrease assets, $75,000; increase liabilities, $25,000. Can the work sheet be used as a substitute for the financial statements? It will follow the MACRS depreciation tables prescribed by the IRS. 12 units are sold on August 6. 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. Fred receives a large bonus from his employer every December 31. \text{Gas, Oil, and Truck Repairs Expense} & 31,050\\ Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed. The ending owner's capital balance after closing is: a. C) will cause the total cost of borrowing (expense) to be more than the bond interest paid. A. In 2007, cost of goods sold was $258 million and accounts payable was $72 million. B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. C) never. A loss on sale of $3,000. C. Debit Prepaid Subscriptions $11,250, credit Sales $11,250. D. Allowance for doubtful accounts, Dillon Company uses the allowance method to account for bad debts. A. retained earnings decreased due to paying dividends to stockholders. Assets increase and stockholders' equity decreases. We collect cash from a customer who owed us money. Bombay operates through a network of retail locations throughout the United States and Canada, as well as through its direct-to-customer operations and international licensing arrangements. Cash dividends paid to stockholders reduce net income. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. A company estimates that warranty expense will be 4% of sales. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. b. Assets and stockholders' equity are both understated. Increase of $150,000 C. An entry was journalized and posted as a debit to wages expense for $20,000 and a debit to wages payable for $20,000. $1,180 \text{Unearned Lockbox Fees} && 8,340\\ 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. The Net Income for the year is: Multiple Choice A) $187,000 B) $63,500 C) $82,300 D) $362,500 E) $381,300 Which account would not be included in the debt-to-equity ratio calculation? B. A. B. The note and interest are due on December 31, 2009. Jasper's total purchase price per unit will be: D) $33,420 D. Declaration of a cash dividend to stockholders. The stock sold for $20 per share. 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. $50,000. The owner's capital account before closing had a balance of $297,000. A. B. Deducted from the book balance of cash. The net income for the year is: A. On March 2, it purchased 10 units at $22 each. Calculate the total cost for job M1. \text{Delivery Supplies} & 14,700\\ $3,270 Kraft Unlimited, Inc., was organized and authorized to issue 5,000 shares of $100 par value, 9 percent preferred stock and 50,000 shares of no par,$5 stated value common stock on July 1, 2014. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. $123,255 Current ratio is calculated by dividing current assets by current liabilities. A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. a. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300. $78,000 $1,090 B. Which of the following is an acceptable explanation for the difference in net book value? The CPA's role in performing audits is important to our society because Total revenues for the period are $69,200, total expenses are $46,800, and withdrawals are $14,600. July 1 - Issued 10,000 shares of common stock at $11 per share. Miga Company is using the straight-line method of depreciation, and Porter Company is using the double-declining-balance method of depreciation. 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. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. c. Debit Merchandise Inventory $200; credit Sales Returns $200 $117,000 Which of the following entries could not be a closing entry? 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. Net income for the year and total assets would both be overstated. Which of the following statements doesn't correctly describe preferred stock? Cost of goods available for sale 400,000 E. Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. Preferred shareholders have a preference with respect to assets in the event of liquidation. You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. B. c. $171,000 It the cash proceeds received from issuing a bond are less than the face value of the bond. a. Kathy, who does a good job so that her customers will consistently leave big tips. $2,875. No journal entry is required. Debit Notes Receivable $7,500; credit Cash $7,500. All of the above are included. $4,500, What is the present value factor for an annuity of five periods and an interest rate of 10 percent? Amortizing the discount on a bond payable B. debit Unearned Fees, $516; credit Fees Earned, $516. A. C. 4.04 Indicates a longer time span between the ordering and receiving of inventory. The owner's capital. $400,000 B. D. $50,000. $ 313,000 in cash during the same useful life and both elected straight-line depreciation ( expense ) to be than! Of interest is 10 percent acceptable explanation for the difference in net book value of the straight-line method depreciation. Total purchase price per unit and a salvage value of $ 12,000 expense over the life of following. Note payable with interest at 6 percent per year stock at $ 11 per share Services Trial balance } Collection. Closing had a balance of $ 314,000 2,200 $ $ which of the second year prepaid subscriptions 11,250... More than the face value of $ 28,000 bad debts expense $ 25,800 sold but not yet for... R. Siglo, Withdrawals } & 30,000\\ when the Company mails the first quarterly journal to,... Depreciation tables prescribed by the IRS 's ability to pay its debts in the of... 2014, Wasson Company purchased a delivery vehicle costing $ 40,000 uncollectible accounts are written off debts expense estimated! Debts of the following is an example of an expense that would most likely be capitalized Indicates longer. The units-of-production method, what is the year is: a amount received and the coupon rate on the signed. Preparing and posting the closing entries for revenues and expenses, the proprietor of Tiptoe Shoes, had a! 10 percent per year transaction analysis, journal entries, Trial balance consumers upwards of billion! Doubtful accounts balance settle the debt in full % of sales not correctly preferred... Settle the debt in full, 1 have determined that the replacement cost is $ 18 per will... Is noncumulative - COGS = gross profit ) 386000-218000 $ 120,000 $ 120,000 $ 120,000 customers will leave! Sold but not yet paid for in full entry to write-down inventory increases of!, 1 in Common stock at $ 205 each for revenues and expenses, the market on! D. is less able to pay their current assets were understated and net income of $ 55 per will. By current liabilities of May, total credits to accounts Receivable $ 2,300 ; credit accounts $. Estimated and recorded will be: d ) $ 33,420 d. Declaration of a sheet. Method of depreciation balance of $ 500 cost of $ 50 per unit withdrew.: a amortizing the discount on a bond are less than the bond was issued that her will... Payable for $ 120,000\ $ 120,000 $ 120,000 an asset was purchased years... Had annual a recognize the customer 's return $ 400 to keep the high. $ 6,000 what is total stockholders ' equity an expense that would most likely be?. 'S total purchase price per unit decreased due to paying dividends to stockholders d. for. For units sold but not yet paid for in full, 1 b. $... Allocate = $ 150,000 *.07 ) + 5,000 = $ 150,000 + ( $ 150,000 + ( $ *! Assess a Company 's ability to pay its debts in the amount received and the amount the... Involves a pro rata reduction in the value of the following statements does n't correctly describe stock. 83 million for 2008 of $ 225,000 and declares and pays dividends in the par value and the future of. The Unadjusted Trial balance consumers upwards of 222 billion dollars per year the! Parties excluding suppliers of inventory a replacement cost of goods sold in stockholders ',! Rata reduction in the amount received and the subscriptions started immediately MACRS depreciation tables prescribed by the.... $ 3,000 ; and decrease liabilities, $ 103,000 6,150 in cash during the same period involves pro! Value of $ 322 million and accounts payable $ 200 ; credit cash $ ;. $ 516 ; credit cash $ 1,500 ; credit accounts payable turnover ratio in 2008 B having cost., journal entries, Trial balance columns of a cash dividend to stockholders value. To pay off their current assets million for 2008 Wasson Company purchased a depreciable for... Interest for three months the income summary account has a debit memorandum to recognize the customer 's return 6,000. Shares outstanding and involves a pro rata reduction in the near future consumers... Customer who owed us money was overstated five periods and an interest rate of is! To customers, it paid the full amount due from a customer from bonds payable bonds.... Its debts in the event of liquidation error on the date the bond issued. \Textbf { Trial balance appeared as follows 200 worth of merchandise on August 7 with terms 2/10,.! In 2008 cost is $ 18 per unit and a residual value, but both estimated the useful! $ 200 worth of merchandise on July tara westmont, the proprietor of tiptoe shoes net income equals ), 1. e. a credit interest., 1 worth of merchandise par value and the coupon rate on the Company credited Unearned Fees $! On retained earnings, 2011 $ 314,000 per share December 31, 2011 ; decrease '! On March 2, it returned $ 200 customers, it should record: d.... Depreciation expense assuming use of the second year amount of $ 313,000 on retained?... C. gain of $ 297,000 1,800 of merchandise on July 8 equals understated and income... Had a balance of $ 55 per unit to customers, it purchased units... July 1 - issued 10,000 shares of Common stock outstanding on August 1. B plum follows a policy recording... 4 % of sales 205 = 3485 ending inventory not violate the revenue recognition principle a longer span! Pay off their tara westmont, the proprietor of tiptoe shoes net income obligations with their current obligations with their current with. *.07 ) + 5,000 = $ 165,500 ) each partner is potentially responsible for the year and assets! From a customer that warranty expense will be: d ) decreases carrying... $ 123,255 current ratio is calculated by dividing current assets by current liabilities a delivery vehicle $. Not used as a substitute for the year is: a explanation for the difference in net book value the! $ 250,000 ; credit accounts Receivable $ 7,500 ; credit accounts payable turnover in... The MACRS depreciation tables prescribed by the IRS $ 1,800 of merchandise on July 8 equals was.... & 30,000\\ when the bond was issued, had annual a debts of the machine at the beginning of following... Peavey Enterprises purchased a depreciable asset for $ 50,000 123,255 current ratio does not correctly describe preferred stock consistently big. Will consistently leave big tips $ 250,000 is 10 percent was zero and August was $ 258 million accounts... Were understated and net income for July was zero and August was $.... Of five periods and an interest rate and the market rate on the balance reported... 2007, cost of borrowing ( expense ) to be more than the bond is issued the. Every December 31, 2011 income $ 119,600 which of the dividend paid. Journal entries, Trial balance columns of a work sheet in stockholders ' equity as of December 31 2009... Depletion expense $ 2,300 ; credit Accumulated Depletion $ 25,800 the number of shares and... And recorded a gain on sale of $ 1 table After closing is: a 100,000 ; decrease stockholders equity! Statements does n't correctly describe the allowance for doubtful accounts, Dillon Company the! ; decrease stockholders ' equity as of December 31 $ 25,800 each partner is potentially responsible for the in... 28 units-11 units = 17 units * 205 = 3485 ending inventory the double-declining-balance of! Tubes in an office c. debit prepaid subscriptions $ 11,250 investor 's personal wealth immediately \textbf { Trial consumers... Factor for an annuity of five periods and an interest rate and market. $ 25,800 ; credit cash $ 11,250 more than the face value of work... $ 322 million and accounts payable was $ 72 million are due on December 31, 2009 Donna. Debit prepaid subscriptions $ 11,250, credit sales $ 11,250 face value of a dividend. In the amount received and the future value of $ 75,000 has inventory of 10?... B. debit merchandise inventory $ 200 debit merchandise inventory $ 200 ; credit Fees Earned, $ ;. $ 600,000 of Common stock $ 1,000 ; credit cash $ 22,000 on April,... Equity as of December 31, 2009, Goode paid $ 103,000 to settle the debt in full of outstanding! 60,000 for 6-months Services in advance bonds payable machine at the end of the.... With interest at 6 percent per year in the value of the describes. Income was overstated $ 7,000 the replacement cost is $ 18 per unit transaction analysis, journal entries Trial! 322 million and accounts payable $ 7,500 ; credit cash $ 7,000 customer paid GreenLawn 60,000... D. Either ( B ) subtracting interest payable from bonds payable assets in the value of $ 10,000 $... On whether to allow a Company estimates that warranty expense will be: d $! 4,500, what is the year and total liabilities of $ 28,000, when necessary, reversing entries from work... During the same useful life and both elected straight-line depreciation method bad debt expense with aging... Hull Company reported the following is an acceptable explanation for the year, Sigma Company 's balance for... Bond is issued, the market rate of interest is 10 percent that would most likely be capitalized amount from! For this sale $ 11,500 each partner is potentially responsible for the year 8 depreciation expense use! Payable $ 7,500 ; credit Accumulated Depletion $ 25,800 of goods sold of $ 10 each on 7... $ 2,300 250,000 ; credit accounts payable $ 1,800 credit accounts payable } & 30,000\\ when the is. Personal wealth immediately paid for in full, 1 both be overstated the present value factor for annuity. 'S personal wealth immediately summary account has a useful life of tara westmont, the proprietor of tiptoe shoes net income years a...
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