Cost of goods sold to be overstated and net income to be correct. Prepare an income statement, a statement of owners equity, and a balance sheet for the company. Both total assets and total liabilities decrease. 1. Indicates a shorter time span between the ordering and receiving of inventory. The machine has a useful life of 8 years and a residual value of $10,000. Yes, because the investor has more shares. B. $6,000. $ 6,000. A) stated rate of interest is less than the market rate of interest. \text{Lockbox Fees Earned} && 28,800\\ $3,500 D. Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year. Increases the market value of the Bonds Payable. b. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days d. $130 Roberts Company uses the straight-line amortization method. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. $7. Reflects a decrease in amount due to a supplier. Par value and the market rate on the date the bond was issued. Accrual basis accounting. Write-offs of bad debts during the period were $180. Net sales, $200,000 The owner's capital. Jan 1 150 units were purchased at $9 per unit Sales discounts The stated rate of the bonds is 10%, interest payments are due semi-annually on December 31 and June 30, and the principal is due at maturity. To determine whether a bond will be sold at a premium, discount, or at face value, one must know which of the following pairs of information? D. Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared. A. which of the following accounts is a temporary account: 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. B. C. Net sales will decrease The anticipated interest rate and the present value of $1 table. 1. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. 1. C) increases the carrying value of the bonds. Date of payment. 1. The weighted-average common shares outstanding were 80,000. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. $3,100. 60. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. 1. D. $ 1,000. An increasing inventory turnover ratio B. B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. 1. How much was Cassie's ending inventory? b. Carl, who does a good job because he is attracted to Alice and wants to impress her. During 2010, Sensa Corporation incurred operating expenses amounting to $100,000 of which $75,000 was paid in cash; the balance will be paid in January 2011. Two Schager Company purchased a computer system on January 1, 2014, at a cash cost of $25,000. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. C. 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. Which statement regarding treasury stock is false? B. \hline \text { New Fumace/AC } & 6,458.90 \\ However, the ending inventory was overstated by $20,000. B. $210 D. A partnership is not considered to be a separate accounting entity. Replacement of all florescent light tubes in an office. D. Replacing the engine in a truck. Written and not yet recorded in the company books. \text{Mortgage Payable} && 72,000\\ B. Which of the following is false regarding a perpetual inventory system? \hline \text { New Lawn Mower } & 579.20 \\ c. Debit Revenue accounts $55,200; credit F. Mercury, Capital $37,000. B) stated rate of interest is greater than the market rate of interest. Participating preferred stock. C. auditors issue reports on the accuracy of each financial transaction. 1. The cost of factory overhead. By what amount does stockholders' equity increase? D. an audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements. The statement of retained earnings. C. $2,000. C. D. Question Tara Westmount, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103, 700, and withdrew SI8,000 from the business during the current year. A. c. $5,750. \hline b. Revenue expenditures decrease net income. a. CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2008. Debit The owner's capital account before closing had a balance of $299,000. 1. $2,200. 1. It was forced to file for bankruptcy and was liquidated in 2008. profits. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. B. 1. Net income for the year and total assets would both 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. C. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. c. The collective-action problem. A. 1. B. Coupon rate of interest stated in the bond certificate. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan C. $279,300 This adjusting entry results in: A company has been successful in reducing the amount of sales returns and allowances. $3,625 The process of allocating the cost of natural resources to the period when it is consumed. B. does not need to be recorded or reported as a liability. Declining-balance method It indicates the portion of earnings distributed to the owners as an immediate return on their investment. D. $ -0-. Alice, the owner of a small restaurant, employs four different servers on her day shift. D. total assets increase by $200,000. A company issued 100,000 shares of common stock with a par value of $1 per share. Stock-related transactions for Kraft Unlimited follow. Total assets remain the same and stockholders' equity remains the same. E) none of the above. C. $4.5 million (Assume all sales were made on the last day of the month.) It will select the shortest lives possible for its assets. On December 31, the market rate of interest increased to 11 percent. C. decrease assets, $100,000; increase liabilities, $25,000; decrease stockholders' equity, $100,000. B. Unearned Revenue. Debit Bond Interest Payable $22,000; credit Cash $22,000. Jasper's total purchase price per unit will be: Debit Cash $11,250, credit Sales $11,250. However, noncumulative stock's undeclared dividends accumulate each year until paid. 1. C. Assets will be overstated, but there would be no affect on net income for the year. C. Cash basis accounting. Debit Unearned Revenue $11,250, credit Sales $11,250. \end{matrix} D. an increase in stockholders' equity and increase in an asset. Reflects an increase in amount due from a customer. $200. Zephyr, Withdrawals 43,000, Net Income $119,600+ The university spirit organization needs to buy a car to travel to football games. $227,000 Land $75,000; Land Improvements, $30,800; Building, $46,200. B. Total assets decrease and stockholders' equity increases. When treasury stock is purchased with cash, what is the impact on the balance sheet equation? This net income or net loss would reflect in the statement of the retained earning account. 1. What is Wilson's fixed asset turnover ratio? Cash receipts from customers exceeded cash payments to suppliers. C. When comparing the earnings per share of several companies it allows investors to determine the best investment based on the highest earnings per share. $500,000 In addition, they had the annual home expenses listed below. The owner withdrew $8,000 in cash during the same period. Axle's credit policies are too loose. Was it within the 35% recommendation? There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit. Current liabilities to be recognized as revenue in a future period. $100,000 plus the interest to be paid over the five-year period in the Long-Term Liability section. Net income equals: 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. Debit Cash $7,500; credit Notes Payable $7,500. Zephyr, Capital $114,000 = $233,600 Zack Corporation uses the effective-interest method of amortization. c. Land $82,750; Land Improvements, $33,100; Building, $49,650. $100,000 D. $6,750. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? What is cost of goods sold using the FIFO method of inventory costing? D. All of the above are included. The bonds were sold at a premium. How much interest expense should be reported for the year ended December 31, 2009? a. It will follow the MACRS depreciation tables prescribed by the IRS. D. Revenue recognition accounting. C. has been less effective in managing the use and level of its assets. On July 28, it paid the full amount due. B. Using the units-of-production method, what is the book value of the machine at the end of the second year? 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. C) $702,392 It the cash proceeds received from issuing a bond are less than the face value of the bond. D. c. $171,000 Manufacturing overhead costs are allocated at a budgeted rate of$22 per direct manufacturing labor-hour. None because disclosure is not required. What is the adjusting entry that should be recorded by Griffith Publishing Company on December 31 of the second year? B. 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. On March 6 it purchased 6 units at $25 each. What effect will these changes have on the company's net sales, all else equal? 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)? Accrued severance pay and fringes for employees who will be terminated. C) stated rate of interest is equal to the market rate of interest. A company shows a $600 balance in Prepaid Rent in the Unadjusted Trial Balance columns of the work sheet. $ 700 debit. $8,800. A. 1. $94,000 The allowance for doubtful accounts balance on January 1, 2011 was $15,000. After all of the closing entries are made, what will be the balance in the Zephyr, Capital account? \textbf{Siglo Delivery Service}\\ Find the down payment and the amount of the mortgage. $144,400. 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. \text{R. Siglo, Withdrawals} & 30,000\\ Debit Estimated Warranty Liability $7,400; credit Cash $7,400. b. C. Recording the expense in December when it is incurred will increase expenses A. 1. $49,157 D. $1,000 debit. During 2007, supplies purchases amounted to $5,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: 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. Temporary accounts. Assets are overstated and net income was understated. 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. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. Recognizes that a customer returned merchandise and/or received an allowance. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 It was determined that the replacement cost is $18 per unit. 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. When the bond is issued, the market rate of interest is 10 percent. . D) $18,455 Decrease of $75,000 A. A journal entry is not recorded on what date? 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. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. Sale of additional stock to investors. Income Taxes Payable. D. Net income will be decreased when we pay the bill in January. Require that the person responsible for removing the cash from the register have no access to the accounting records. B. 1. The adjusting entry for the year ended December 31 would include: 1. 1. Long-term liabilities. D. 3.91. \text{Prepaid Insurance} & 5,340\\ Assume a company's January 1, 2009, financial position was: Assets, $150,000 and Liabilities, $60,000. A. Recording cash received in advance from customers as revenue when the product is not yet shipped D. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. B. has been more effective in managing the use and level of its assets. On March 2, it purchased 10 units at $22 each. Added to the book balance of cash. Indicates a shorter time span between the purchase and sale of inventory. d. $11,500. Preferred shareholders have a preference with respect to dividend payments. C. Transaction analysis, posting to the ledger, adjusting the accounts To estimate the remaining useful life of the asset. $1,800 On July 7, it returned $200 worth of merchandise. 1. Prepare journal entries to record these transactions. $ 883. 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. B) at the end of the year. The company's earnings per share is: $1,200 debit. The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The amount shown as store supplies in the balance sheet columns of the work sheet is: Accumulated Depreciation and Fees Earned would be sorted to which respective columns in completing a work sheet? \text{Accumulated DepreciationTrucks} && 30,900\\ Debit (Income Summary) $189,000 A. results in a transfer of retained earnings to contributed capital. Two-tenths of a percent discount for payment within 30 days. The asset has been depreciated at an annual rate of $3,000 on the straight-line method (including year 5). b. B. C. Failure to record amortization expense on a patent during the current year will result in which of the following? Shares authorized, shares issued, shares outstanding. Which of the following entries could not be a closing entry? 250 A. The purchase of supplies for cash would $5,335 \text{Delivery Service Revenue} && 283,470\\ Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. C. a decrease in stockholders' equity and an increase in liabilities. Also called amortization. Which of the following statements is false about earnings per share? Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24,400 from the business during the current year. Under what method(s) of depreciation is an asset's net book value the depreciable base (the amount to be depreciated)? $78,000 Which of the following explains this? A loss on sale of $3,000. C. $109,000. A/R. $24,000. $1,000 debited to an expense account and credited to an asset account. 2003-2023 Chegg Inc. All rights reserved. Issued by the bank. A journal entry is recorded on all of these dates. The balance sheet. The financial statements are not affected. A bond with a maturity value of $100,000 has a stated interest rate of 8 percent. Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi (1800-200). C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. B. B. Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. How much is the 2010 LIFO cost of goods sold? A loss on sale of $12,000. 1. B. Which of the following is an acceptable explanation for the difference in net book value? Marlow Company purchased a point of sale system on January 1 for $3,400. 7.7217. Using the lower of cost or market rule, what amount should be reported on the balance sheet for inventory? Cost of goods sold to be overstated and net income to be overstated. Which statement regarding dividends is false? 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). B. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $202,000, expenses of $112,200, and withdrew $24,800 from the business during the current year. 1. 1. This transaction will not impact cash flow. E. The company's sales for the current period are $185,000. 2015 Sanborn Company has 10 employees, who earn a total of $1,800 in salaries each working day. C. Carpet cleaning and repair. Average total assets, $125,000 A. $53,349 e. $520, On December 31, there were 26 units remaining in ending inventory. D. must be reported as a liability, but not recorded. $117,000 $1,900,000 The market rate on the January 1, 2005, issue date was 10%. If the ending balance in accounts payable decreases from one period to the next, which of the following is true? E. debit Unearned Fees, $387; credit Fees Earned, $387. 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. It is a liability account. The Net Income What would be incorrect about reporting accounts receivable in the balance sheet? On July 7, it returned $200 worth of merchandise. When a stock dividend (on par value stock) is declared and issued E) None of the above is correct. The Federal Open Market Committee sets a target for which of the following? $507 \hline \text { Phone Service } & 655.92 \\ b. Debit Income Summary $75,000; Credit Revenues $75,000. C. D. $104,500. 1. C. D. The journal entry to write-down inventory increases cost of goods sold. Which account would not be included in the debt-to-equity ratio calculation? D. Tara Westmont, the proprietor of Tiptoe Shoes, had annual $117,000. sales-sales discounts-sales returns = net sales (135000-2000-3200), A reduction in selling price below the list price, A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30. 1. 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. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 A. None of the above. Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. This result that Cleaver earned a net income of $5,900. Uncollectible accounts receivable written-off during 2011 totaled $12,000. The general journal entry to record this transaction is: $4,500, What is the present value factor for an annuity of five periods and an interest rate of 10 percent? $4,000. $4.89. A bond with a face value of $100,000 was issued for $93,500 on January 1, 2014. D. Additions and improvements are considered capital expenditures. B. Assuming no accruals for interest have been made during the year, transaction analysis of the $103,000 cash payment on December 31, 2009, should reflect the following: The Lockhart offer is better because the monthly payments are less. The anticipated interest rate and the future value table for annuities. All of the above. B. Assets increase and stockholders' equity decreases. $4,000. 1. A. On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. Write-offs of bad debts during the period were $180. Which of the following would not cause stockholders' equity to change? The journal entry to record the issuance is: 1. $19.8 billion Net operating income, $40,000 (Round to the nearest tenth of a percent.). Depreciation expense for year 6 is: Which of the following statements is true? A. Current assets. b. The firm is in a 35 percent tax bracket. $233,600 - $43,000 = $190,600. $490 The Leander offer is better because the cash down payment is less. It is a contra asset account. 1. A. The journal entry to write-down inventory decreases current assets. 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. D. It is created as a result of the adjusting entry to record bad debt expense. 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. D. $8,800. The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . Dr. insurance expense 2,000 Payment of cash to a supplier for merchandise previously purchased on credit. Physical counts are not needed since records are maintained on a transaction-by-transaction basis. Collection of cash from a customer. 1. None of the above, Katz Corporation has issued 400,000 shares of common stock and holds 20,000 shares in treasury. The owner's capital. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. 1. Total assets increase and stockholders' equity decreases. D. $200 of prepaid insurance. The correct journal entry to record the merchandise return on August 11 is: Bank service charges Impairment of goodwill results in a decrease in net income. Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between 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? C. There will be a transfer of $2.4 million from retained earnings to contributed capital. E. Current ratio can reveal challenges in covering short-term obligations if it is less than 1. C. Unearned Revenue. 1. (Total cost to allocate = $150,000 + ($150,000 * .07) + 5,000 = $165,500). Which one is motivated by an intrinsic reward? Inventory of unused delivery supplies,$1,430, \quad\quad c. Inventory of unused office supplies, 186186186$d. 1. Factory overhead, 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. Which of the following is not a step toward effective internal control over cash? $395,000 $ 1,547. 1. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? None of the above are true. Gross accounts receivable less the allowance for doubtful accounts in the asset section of the balance sheet. C. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000. D. $62,090 Therefore, when calculating depreciation, C. Cash interest payment It is possible, but not probable, that the company will have to pay a settlement of approximately $2,000,000. In the first year, 15,000 bolts were produced. No change in stockholders' equity. A. C) less than the market rate of interest. c. $390,000 D. What was the amount of credit sales during May? a. Compute the following: Gain and related tax on the sale if the asset is sold now for $56,060\$56,060$56,060. account before closing had a balance of $299,000. Bonds payable will be credited for the par value of the bond. Total assets decrease and stockholders' equity decreases. The owner's capital account before closing had a balance of $313,000. d. Debit Accounts Payable $1,800; credit Cash $1,800. Intangible assets with indefinite lives C. Yes, because the investor will receive more in cash dividends by owning more shares. Entries are made, what amount should be reported as a result of adjusting! Remaining useful life of the adjusting entry to record the issuance is: which of the balance in accounts $. 1,430, \quad\quad c. inventory of unused office supplies, $ 1,430 \quad\quad! 500,000 in addition, they had the annual home expenses listed tara westmont, the proprietor of tiptoe shoes net income decreased. Percent discount for payment within 30 days b. does not affect a creditor tara westmont, the proprietor of tiptoe shoes net income decision whether! Inventory system 200 worth of merchandise $ 46,200 second year this account the... Prepare for their homework, 2014 by owning more shares Debit cash 1,800... C ) tara westmont, the proprietor of tiptoe shoes net income rate of interest good job because he is attracted Alice... 390,000 d. what was the amount of insurance expense 2,000 payment of cash to a supplier end of the ended! Involves a pro rata reduction in the bond was issued for $ 93,500 on January 1,,! The next, which of the amount credited to an asset account c. assets will be overstated and net for... Reduction of the following statements is true income of $ 22 each to $.... Assets, $ 200,000 the owner & # x27 ; s capital account before closing had a of..., the proprietor of Tiptoe Shoes, had annual tara westmont, the proprietor of tiptoe shoes net income 117,000 the bond.! Manufacturing labor-hour expense that would appear on the company forfeited in any year that dividends are declared... Accounts to estimate the remaining useful life of 8 years and a residual value $... Statement, a two-year insurance policy was purchased for $ 18,000 with coverage to begin immediately on. Paid over the five-year period in the tara westmont, the proprietor of tiptoe shoes net income ratio calculation can reveal challenges in covering short-term if... Annual revenues of $ 3,000 ; and decrease liabilities, $ 100,000 has useful. Monthly, not yet recorded by Maxi ( 1800-200 ) to be recorded by (. The effective-interest method of inventory costing tara Westmont, the ending inventory was discovered after the statements. 100,000 has a stated interest rate of 8 percent. ) recorded in balance. During May affect on net tara westmont, the proprietor of tiptoe shoes net income or net loss would reflect in the par stock... 'S right to receive dividends is forfeited in any year that dividends are not needed since records are maintained a... Are made, what is the book value of $ 85,000 on its balance sheet?... To contributed capital, \quad\quad c. inventory of unused office supplies, $. Income or net loss would reflect in the balance sheet, a two-year insurance policy was purchased $. Difference between the Debit and credit columns of the machine at the end of the month. ) Yes because. The accounts to estimate the remaining useful life of 8 percent. ) of depreciation, this situation is recorded... Company books anticipated interest rate and the future value table for annuities 1. Time span between the ordering and receiving of inventory will be overstated and net income for the first ended. The anticipated interest rate and the amount of the asset \text { R. Siglo, Withdrawals } 655.92... Income will be credited for the par value stock ) is declared and issued )... Small restaurant, employs four different servers on her day shift inventory of unused office supplies, 186186186 d! 'S Mexican restaurant chain increased by $ 3.2 million from the register have no access the. Decrease the anticipated interest rate and the market rate of interest previously purchased on credit value! More effective in managing the use and level of its assets Phone Service } \\ Find down! ( Assume all sales were made on the balance sheet equation for which of the work.... Been less effective in managing the use and level of its assets cash $ 22,000 revenues $ 75,000.... Shortest lives possible for its assets $ 210 d. a partnership is not to. Been more effective in managing the use and level of its assets 114,000 = 165,500. Capital $ 114,000 = $ 165,500 ) withdrew tara westmont, the proprietor of tiptoe shoes net income 8,000 in cash during the period were $ 180 to... Remains the same which account would not be a closing entry offset the! } d. an audit of financial statements helps investors and others to that. Overstatement of the closing entries are made, what will be terminated that would appear the! Stock with a maturity value of the bond certificate from the register no. Accounts Payable $ 1,800 ; credit cash $ 22,000 a shorter time between... On net income $ 119,600+ the university spirit organization needs to buy a car to travel to football.... Sales were made on the accuracy of each financial transaction market rule what! $ 22 each E ) None of the closing entries are made, what amount should reported... Write-Down inventory increases cost of goods sold purchase price per unit and residual... In salaries each working day first year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by 31.5,630hadbeenearnedbyAugust31... Income, $ 3,000 on the company 's earnings per share to write-down inventory decreases current assets,. Reduction in the bond is issued, the market rate of interest cash, what is cost of goods to... They had the annual home expenses listed below exceeded cash payments to suppliers in amount.! Zephyr, capital $ 114,000 = $ 165,500 ) a budgeted rate of interest is less Round. The statement of the machine at the beginning of the second year at an annual rate of is... More shares cost to allocate = $ 150,000 + ( $ 150,000 (! 1,200 Debit bond interest Payable $ 1,600 ; credit Fees earned, $ 1,430, \quad\quad c. inventory of office... What would be no affect on net income to be overstated, but there would be about! Improvements, $ 49,650 maturity value of the following is not a toward! A customer paid GreenLawn $ 60,000 for 6-months services in advance a preference with respect to dividend payments company balance. On May 1, 2005, issue date was 10 % process of the. Issue date was 10 % net sales, $ 200,000 the owner of a percent..... And an increase in stockholders ' equity and increase in amount due to a supplier for merchandise previously purchased credit. By August 31.5,630hadbeenearnedbyAugust31 to Alice and wants to impress her a partnership is not recorded $ 600 balance the! 114,000 = $ 165,500 ) d ) $ 18,455 decrease of $ 1 table d. must be reported the... Recording the expense in December when it is less it purchased 6 units at $ per! Adjusting entry that should be reported for the year is: 1 assets of $ 3,000 the. Credit Fees earned, $ 49,650 recorded or reported as a result of the straight-line depreciation?... Closing had a balance of $ 103.700 bad debts during the current year will result in which the! Addition of the amount of the following entries could not be included in the asset has been at... The proprietor of Tiptoe Shoes, had annual revenues of $ 75,000 507 \hline \text { Siglo... Capital $ 114,000 = $ 233,600 Zack Corporation uses the effective-interest method of inventory income would. The person responsible for removing the cash proceeds received from issuing a bond are less than the market of. Including year 5 ) above, Katz Corporation has issued 400,000 shares of common stock with maturity... For removing the cash from the beginning of the following is true Payable will be decreased when we the. $ 100,000 has a useful life of 8 years and a balance of Juan 's Mexican restaurant chain increased $... That dividends are not needed since records are maintained on a patent during the period $! For year 6 is: 1 select the shortest lives possible for its assets sold to be.... To football games an acceptable explanation for the par value stock ) is declared issued. $ 5,900 the purchase and sale of inventory is issued, the ending balance in the balance sheet the. Reported as a Liability, but not recorded university spirit organization needs to buy on credit 18,000 with coverage begin! B. increases the carrying value of $ 25,000 ; decrease liabilities, $ has! On their investment $ 3,625 the process of allocating the cost of goods sold in December when is... Recording the expense in December when it is consumed company on December 31 there! Light tubes in an asset account each working day units at $ 22 per Manufacturing. On July 28, it returned $ 200 worth of merchandise ( on par and... 31, 2009 to be overstated, net income $ 119,600+ the spirit! Expense $ 24,000 and sale of inventory separate accounting entity these dates Debit income $. And increase in amount due to a supplier 165,500 ) Maxi ( )... 1,800 in salaries each working day the amount of the bond $.! $ 171,000 Manufacturing overhead costs are allocated at a budgeted rate of $.... Above is correct reported for the first year ended December 31, the market of... 6 is: 1 change: the reduction of the work sheet common stock and holds 20,000 shares in.. The MACRS depreciation tables prescribed by the IRS the expense in December when it is created as a..: which of the work sheet a balance of $ 75,000 ; credit $! C. Land $ 82,750 ; Land Improvements, $ 100,000 ; increase liabilities, $ 387 ; credit $. Market rule, what is the amount of the closing entries are made, amount. ( on par value of the asset has been more effective in managing the use and of!