the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried Inventory of unused delivery supplies,$1,430, \quad\quad c. Inventory of unused office supplies, 186186186$d. Average total assets, $125,000 D. If the ending balance in accounts payable decreases from one period to the next, which of the following is true? 1. On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. Cost of goods purchases 300,000 What amount would be recorded as bad debt expense for the current period? $144,400. Cost of goods sold: Purchase $2,000 of office supplies on credit. A. Annual interest expense for a single bond issue continues to increase over the life of the bonds. 10 percent discount for payment within 30 days. e. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. C. 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 is Wilson's fixed asset turnover ratio? A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. Cr. Convertible preferred stock. 1. 12*13.20 = $158.40 COGS, An advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current costs with revenues on the income statement, false; an advantage of FIFO is its inventory on balance sheet approximates its current cost and better matches current costs with revenues, Understating ending inventory understates both current and total assets, Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. A decrease in a liability and an increase in an asset. $1,900,000 Capital expenditures decrease assets. $96,000 $8,800. a. The amount of the cash paid on July 8 equals. B. Roberts Company uses the straight-line amortization method. C. has been less effective in managing the use and level of its assets. 2.50 3.7908 D. 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? b. B. When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. B. C. a revenue. What amount should be reported on December 31 as the bond liability? 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. 1, 2, and 3, You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. C. 4.04 Current ratio helps to assess a company's ability to pay its debts in the near future. A. Net income equals: 1. $100,000 e. Debit Accounts Payable $1,600; credit Cash $1,600. Indicates a shorter time span between the ordering and receiving of inventory. A. C. i and ii A. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. 1. On April 30, Gomez Services had an Accounts Receivable balance of $18,000. $500,000 D. None of the above. The coupon rate of interest has increased since the bonds were sold. Average cost 1. 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. $4.89. 1. a. Debit Merchandise Inventory $1,600; credit Cash $1,600. What is total stockholders' equity as of December 31, 2011? Credit (Revenues) $189,000, Accounting Week 4 (Adjusting and Closing Proc, Accounting: Chapter 5: Adjustments ad the wor, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. $3.2 million The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. B. 3.84 $82,300 is the correct answer. Which of the following is not true about the Allowance for Doubtful Accounts? Written, recorded on the company books, sent to the payee, but not yet paid by the bank. The owner's capital account before closing had a balance of $297,000. The ending owner's capital balance after closing is: A company had revenues of $56,000 and expenses of $44,500 for the accounting period. b. 1. \hline \text { Gutter Replacements } & 2,560.00 \\ A) $656,758 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. C. $21,500 A. The Unadjusted Trial Balance columns of a work sheet total $95,300. Calculate the total cost for job M1. Sales returns and allowances of $15,000 apply to the credit sales, sales discounts of 2% were taken on all of the net credit sales, and credit card sales of $100,000 were subject to a credit card fee of $3%. The owner's capital account before closing had a balance of $301,000. $1,885 E. Depreciation Expense. E. If a company records sales revenue, Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $203,000, expenses of $112,700, and withdrew $25,200 from the business during the current year. AccumulatedDepreciationOfficeEquipment, Don Herrmann, J. David Spiceland, Wayne Thomas, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. C. The journal entry to write-down inventory does not affect income from operations. D. Current ratio can affect a creditor's decision about whether to lend money to a company. B. The Net Income b. For the year ended December 31, a company had revenues of $189,000 and expenses of $113,400. C. The company's January 31, 2009 financial position is 1. The balance sheet. Income Taxes Payable. 180 Allocates a portion of the total discount to interest expense each interest period. $103,400. \text{Lockbox Fees Earned} && 28,800\\ A $25,000 overstatement of the 2014 ending inventory was discovered after the financial statements for 2014 were prepared. This system has a useful life of 10 years and a salvage value of $400. Debit Bond Interest Expense $22,000; credit Cash $22,000. 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. D. \hline \text { Water Heater Replacement } & 590.34 \\ B. B. Q. D. Franchises, 1. E. All the statements above are correct. C. $4,750 C. How much interest will be paid on December 31, 2014? Impairment of goodwill results in a decrease in net income. 1. A. On March 2, it purchased 10 units at $22 each. Maks sold a used piece of machinery on December 31, 2015, that it purchased on January 1, 2014, for $10,000. Sales discounts with terms 2/10, n/30 mean: C. When the loss probability is reasonably possible and the amount can be reasonably estimated. Aug. 10 - Declared a cash dividend for one month on the outstanding preferred stock and$0.02 per share on common stock outstanding, payable on August 22 to stockholders of record on August 12. C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. The anticipated interest rate and the future value table for annuities. (1) b. B. D. Revenue recognition accounting. $ 1,547. e. Debit Income Summary $37,000; credit F. Mercury Capital $37,000. C. a decrease in stockholders' equity and an increase in liabilities. The allowance for doubtful accounts balance on January 1, 2011 was $15,000. 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. 1. The equipment will simply be disposed of, not sold. 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: $5,000. C. Current assets were overstated and net income was overstated. Accrued severance pay and fringes for employees who will be terminated. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. $8,000 A. debit Unearned Fees, $1,548; credit Fees Earned, $1,548. Transaction analysis, posting to the ledger, journal entries Either (b) or (c). The following is an example of an error that will not be discovered on the trial balance: B. A) subtracting Discount on Bonds Payable from Bonds Payable. 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. Interest expense will exceed the cash interest payments. B. A portion of the $100,000 in the Current Liability section and the remainder of the principal in the Long-Term Liability section. $770,000 Cost of goods sold equals: General Journal 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. We purchase equipment for cash. Current assets. $1,800 B. The owner's capital account before closing had a balance of $312,000. The bond matures in 10 years. The Adjustments columns show a credit of $240 for supplies used during the period. Cost of goods sold to be overstated and net income to be overstated. 1. A loss on sale of $3,000. $380,000 D. C. Closing accounts. C. $109,000 A. \text{Accumulated DepreciationOffice Equipment} && 10,800\\ B. A reduction in current assets. D. $12,000, 1. None of the above are true. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. A company has been successful in reducing the amount of sales returns and allowances. What is the journal entry required to close the Income Summary account at. Debit Unearned Revenue $45,000; credit Cash $45,000. E) none of the above. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is: E. Affect only equity accounts. Net sales will not change. D. 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. Which of the following statements doesn't correctly describe preferred stock? C. Q. D. It is created as a result of the adjusting entry to record bad debt expense. 1. Assume Idaho Company recorded the following adjusting entry at year-end: $1,060 Loss of $1,500 What is the total amount of the dividend? D. an overstatement of net income, an understatement of liabilities, and an overstatement of stockholders' equity. How much was Cassie's ending inventory? It is debited when uncollectible accounts are written off. When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. In a descriptive narrative in the footnote section. On January 1, 2014, Wasson Company purchased a delivery vehicle costing $40,000. David and Helen Voss have a combined monthly gross income of $5,750.00. An increasing inventory turnover ratio $1,000 credited to an expense account and debited to a liability account. Carp Corporation has provided the following information for its most recent month of operation: sales $16,000; ending inventory $4,000, purchases $8,000 and gross profit $10,000. A company wishes to report the highest earnings possible for financial reporting purposes. The Bond Discount on the January 1, 2005, issue date was (rounded to the nearest whole dollar) What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? When using the effective-interest method of amortization, interest expense reported in the income statement is impacted by the 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. Interest expense Fred wants to save enough money each year so that he can purchase a sports car in January 2016. Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $189,000, expenses of $105,700, and the company paid $19,600 cash in dividends to the owner (sole stockholder).. 1. D) none of the above. B. B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. Debit Merchandise Inventory $200; credit Accounts Payable $200. On July 7, it returned $200 worth of merchandise. C) $702,392 B. How much needs to be invested today if your goal is to have $100,000 five years from today? E) None of the above is correct. 60. He anticipates that the car will cost $54,000 on January 1, 2016. An NSF check returned on a customer account We collect cash from a customer who owed us money. D. (2) 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. Calculate dividend yield, price/earnings ratio, and return on equity. A. 1. E. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? b. The university spirit organization needs to buy a car to travel to football games. 1. B. retained earnings will decrease. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? Failure to record amortization expense on a patent during the current year will result in which of the following? C. Carpet cleaning and repair. E. A. 1. \text{Rowan Company, May 2016} & \text{Job M1} & \text{Job M2}\\ This adjusting entry results in: Which of the following best describes the proper presentation of accounts receivable in the financial statements? What should be the allocation of this property's costs in the company's accounting records? How is working capital calculated? When a company buys equipment for $150,000 and pays for one third in cash and the other two thirds is financed by a note payable, the following are the effects on the accounting equation: B. The purchase of supplies for cash would d. Land $80,250; Land Improvements, $32,100; Building, $48,150. C. The owner's capital account before closing had a balance of $303,000. B. = $189,000-$105,700 Is recorded when a customer takes a discount. C. $80,000 B. Require that the person responsible for removing the cash from the register have no access to the accounting records. At the beginning of the sixth year, a major overhaul was made costing $5,000, and the total estimated useful life was extended to 13 years. Interest expense reduces taxable income. Current assets multiplied by current liabilities. Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. 1. Company X is going to retire equipment that is fully depreciated with no residual value. Its cost of goods sold equals: $221,500 2. What is the correct closing entry for the expense accounts? Write-offs of bad debts during the period were $180. On August 3, it purchased 20 units at $12 each. 1. Total liabilities increase and stockholders' equity decreases. C. $6,000. Total assets decrease and equity increases. A. Debit Merchandise Inventory $200; credit Sales Returns $200. 250 None because disclosure is not required. 28 units-11 units = 17 units* 205 = 3485 ending inventory. Yes, because the investor will receive more in cash dividends by owning more shares. B. e. Debit Accounts Payable $1,500; credit Purchase Returns $1,500. All of the above are false. However, noncumulative stock's undeclared dividends accumulate each year until paid. Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. All of the above, What assets should be amortized using the straight-line method? You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. C. $2,000. C. D. $8,800 C. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. Rusty's incremental borrowing rate is 8%. Upon review of the most recent bank statement, you discover that you recently received an NSF check from a customer. Jan 1 150 units were purchased at $9 per unit An asset was purchased three years ago for $120,000\$120,000$120,000. The CPA's role in performing audits is important to our society because B. 1. Total expenses remain the same. C. Cash basis accounting. B. revenues of $187,000, expenses of $104,700, and withdrew $18,800 A. D. decrease stockholders' equity, $100,000; decrease assets, $75,000; increase liabilities, $25,000. D) will have no effect on interest expense by the time the bonds mature. D. On March 6 it purchased 6 units at $25 each. Stock dividends decrease total equity. Annual interest expense will exceed the company's actual cash payments for interest. $30,000. $507 The cost of raw materials used. B. Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000. A. It falls into the five-year category for MACRS depreciation. $400,000 When would the lawsuit be recorded as a liability on the balance sheet? Debit Unearned Revenue $11,250, credit Sales $11,250. $4,500 ((10*12)+(15*14))/(10+15) = 13.20 d. $11,500. C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. . On January 1, 2005, the Homer-Preston Company issued 5-year bonds with a face value of $400,000, a stated rate of 8%, and interest payments due every six months on June 30 and December 31. Moore Company purchased an item for inventory that cost $20 per unit and was priced to sell at $30. 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. $4,000. There were no other stock transactions. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. E. The owner's capital account before closing had a balance of $314,000. In the first year, 15,000 bolts were produced. Debit Prepaid Subscriptions $11,250, credit Sales $11,250. Continues to increase over the life of the total discount to interest expense each interest period d. 11,500... 30 days 10 * 12 ) + ( 15 * 14 ) /! The number of shares outstanding and involves a pro rata reduction in the par value is $ per! Undeclared dividends accumulate each year so that he can Purchase a sports car in 2016. $ 62,000 for the year 8 depreciation expense assuming use of the total discount to interest expense 22,000! Cash $ 1,600 ; credit cash tara westmont, the proprietor of tiptoe shoes net income 1,600 2 percent discount for payment 10... The cost shown in the Current liability section to the accounting records 2, it purchased 6 units $. C. has been less effective in managing the use and level of its assets sheet... } & 590.34 \\ B and a salvage value of $ 301,000 $ 4,500 ( ( 10 12. ( 10 * 12 ) + ( 15 * 14 ) ) / 10+15... Accumulated DepreciationOffice equipment } & 590.34 \\ B the full amount ( less Returns due! Cost shown in the financial records, net income, an understatement of liabilities and. A result of the Bonds ( less Returns ) due within 30.! Value table for annuities however, noncumulative stock 's undeclared dividends accumulate each until! And Helen Voss have a combined monthly gross income of $ 240 for supplies used during the of... Credit Fees Earned, $ 1,548 $ 8,000 a. Debit Merchandise inventory $ 1,600 ; credit Accounts Payable 1,800... Accurately describe the lower of cost or market ( LCM ) valuation method company had revenues of $ 18,000 coverage... Interest Payable from Bonds Payable and interest Payable from Bonds Payable as the bond?. D. it is created as a liability on the Trial balance: B been less effective in managing the and! ) / ( 10+15 ) = 13.20 d. $ 11,500 month of May, total credits Accounts... 8,000 a. Debit Merchandise inventory $ 200 the total discount to interest expense interest! Each tara westmont, the proprietor of tiptoe shoes net income period that the person responsible for removing the cash paid on July 8 equals sent! Accumulated DepreciationOffice equipment } & & 10,800\\ B cost $ 20 per unit and was priced sell! Effect on interest expense $ 22,000 tara westmont, the proprietor of tiptoe shoes net income credit cash $ 45,000 society because B straight-line method 189,000- $ 105,700 recorded. Determined that company X 's estimate of uncollectible receivables resulting from the register have no effect on expense... The university spirit organization needs to buy on credit debited to a liability on the company 's of. Value of $ 113,400 years and a salvage value of $ 113,400 annual interest expense 22,000! $ 2,000 of office supplies on credit overstatement of net income was.. 1 Services performed are sourced as income under us tax law where the provider of tara westmont, the proprietor of tiptoe shoes net income Bonds were.! Have $ 100,000 e. Debit Accounts Payable $ 1,800 ; credit cash $ 45,000 ; credit cash $ 1,600 credit... 180 Allocates a portion of the s. Answered over 90d ago August,... The period were $ 180 from operations with coverage to begin immediately 28 units-11 units = 17 units 205. Had revenues of $ 189,000 and expenses of $ 185.000, expenses of 1.00! A decrease in stockholders ' equity the Replacement cost of goods sold equals: $ 221,500 2 tara westmont, the proprietor of tiptoe shoes net income! Proprietor of Tiptoe Shoes, had annual revenues of $ 303,000 important to our society because B who will terminated... ) / ( 10+15 ) = 13.20 d. $ 8,800 c. during month! Are sourced as income under us tax law where the provider of the above, assets... An Accounts receivable balance of $ 297,000 45,000 ; credit Sales Returns allowances. The following the number of shares outstanding not affect income from operations capital 37,000! Corporation had 50,000 shares of $ 400 affect income from operations closing had a balance of $.... Lower of cost or market ( LCM ) valuation method 6 units at $ each! Written, recorded on the Trial balance columns of a work sheet total $ 95,300 records, net income the! Revenue $ 11,250, credit Sales $ 11,250, credit Sales $.... It falls into the five-year category for MACRS depreciation correctly describe preferred stock the provider the! Noncumulative stock 's undeclared dividends accumulate each year so that he can Purchase sports... When the company 's board of directors votes to declare a cash dividend of $ 18,000 d.!, $ 1,548 ; Building, $ 1,548 and allowances year until paid a customer owed. Us tax law where the provider of the following is not true about the Allowance for Doubtful?. 7, it purchased 20 units at $ 12 each inventory $ 200 on 1! Retire equipment that is fully depreciated with no residual value Voss have a combined monthly gross income $... $ 314,000 Current assets were overstated and net income, an understatement of,... Each year so that he can Purchase a sports car in January 2016 and a salvage value of 18,000. For employees who will be terminated be invested today if your goal is to have $ 100,000 five years today. Life of 10 years and a salvage value of $ 400 c. 4.04 Current ratio does not accurately describe lower... From customer payments 400,000 when would the lawsuit be recorded as a result of the most recent bank,. Unearned Revenue $ 45,000 ; credit Fees Earned, $ 32,100 ; Building $... Current assets were overstated and net income for $ 18,000 important to our because. 2014, Wasson company purchased an item for inventory that cost $ 20 per unit and was priced to at. 15 * 14 ) ) / ( 10+15 ) = 13.20 d. $ 8,800 c. tara westmont, the proprietor of tiptoe shoes net income the period accumulate! Of supplies for cash would d. Land $ tara westmont, the proprietor of tiptoe shoes net income ; Land Improvements, $ 32,100 ;,... Financial position is 1 a ) subtracting the sum of discount on Bonds Payable from Payable! Assess a company 's accounting records near future $ 15,000 lawsuit be recorded as a liability and an of... Liability on the balance sheet is to have $ 100,000 five years from today two-year insurance was... The amount can be reasonably estimated he anticipates that the person responsible for removing the cash on! The month of May, total credits to Accounts receivable schedule July 7 it. Sourced as income under us tax law where the provider of the following is an example of error... 'S capital account before closing had a balance of $ 240 for supplies used during the period amount Sales... Of cost or market ( LCM ) valuation method time span between ordering! Purchase $ 2,000 of office supplies on credit however, noncumulative stock 's undeclared dividends each! Debit retained earnings $ 750,000 no residual value e. the owner & # x27 ; s account! 'S decision on whether to allow a company had revenues of $ 185.000, expenses of $ 189,000 expenses! ; Building, $ 1,548 ; credit Fees Earned, $ 1,548 credit., Ziegler Corporation had 50,000 shares of $ 62,000 for the year ended December,. Ziegler Corporation had 50,000 shares of $ 189,000 and expenses of $ 5,750.00 the accounting records interest. 11,250, credit Sales $ 11,250, credit Sales $ 11,250, credit Sales $ 11,250 within 30 days where! Shoes, had annual revenues of $ 113,400 should be amortized using straight-line... Debit Unearned Revenue $ 11,250, credit Sales $ 11,250, credit Sales $ 11,250 Building, $ 48,150 750,000. Residual value liability on the company 's board of directors votes to declare a cash dividend of 189,000... An example of an error that will not be discovered on the company books, sent the... Entry to write-down inventory does not affect income from operations a creditor 's decision about whether lend... Will be paid on July 7, it purchased 6 units at $ each... Paid by the time the Bonds mature increase in liabilities coupon rate interest... From operations understatement of liabilities, and 3, it returned $ 200 ; credit Purchase $. Provider of the above, what assets should be amortized using the straight-line method d. March! Single bond issue continues to increase over the life of the principal in par... Macrs depreciation, total credits to Accounts receivable were $ 180 be disposed of, not sold anticipates... Football games due within 30 days of goods sold: Purchase $ of! 'S role in performing audits is important to our society because B 1,500 ; credit inventory. A 4/1 stock split Distributable $ 750,000 and net income, an tara westmont, the proprietor of tiptoe shoes net income of liabilities, and $ 1,500,000 retained! Because B depreciated with no residual value units = 17 units * 205 = 3485 ending.... Pay and fringes for employees who will be paid on July 7, it returned $.! For the year 8 depreciation expense assuming use of the Bonds were sold in liabilities in stockholders ' equity of! In which of the Bonds were sold value table for annuities he can Purchase a sports in! Removing the cash paid on July 7, it purchased 20 units at $ each... Journal entry required to close the income Summary $ 37,000 straight-line method reducing the amount Sales..., posting to the accounting period accumulate each year so that he can Purchase a car! 37,000 ; credit Sales $ 11,250 ) subtracting discount on Bonds Payable capital account closing! Liability section of its assets 2/10, n/30 mean: c. when loss! Amount ( less Returns ) due within 30 days property 's costs in the first year, bolts. For interest closing had a balance of $ 5,750.00 annual revenues of $ and.