$250 If the ending balance in accounts payable decreases from one period to the next, which of the following is true? D. An NSF check returned on a customer account d. The special-interest effect. D. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. A. 1. The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer. Manufacturing overhead costs are allocated at a budgeted rate of$22 per direct manufacturing labor-hour. E. Total assets increase and equity decreases. 1. It will select the lowest residual values for its assets. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $200,000, expenses of $111,200, and withdrew $24,000 from the business during the current year. 1. Total assets decrease and stockholders' equity decreases. Which one of the following would not be recorded as an intangible asset? Cash interest payment The owner's capital account before closing had a balance of $297,000. Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. On December 31, 2009, Goode paid $103,000 to settle the debt in full. $229,800 Depletion is: E. c. 1.14 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? The understatement of the beginning inventory balance causes: Outstanding checks refer to checks that have been: a) What is an inequality? d. Debit Merchandise Inventory $1,500; credit Cash $1,500. c. $15,125 B. a decrease in liabilities and increase in stockholders' equity. $1,800 d. $20,000 $2,920. a. 1. $500,000 B. The selling price of the bonds was $5,679,575. A company is facing a class-action lawsuit in the upcoming year. It is a contra asset account. 3. the net income for the year is: 1 See answer Advertisement AlanDoris Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $28,000. Gross accounts receivable less bad debt expense in the asset section of the balance sheet. On July 7, it returned $200 worth of merchandise. The retained earnings account before closing had a balance of $312,000. Written, recorded on the company books, sent to the payee, but not yet paid by the bank. Specific identification. 1. The owner's capital account before closing had a balance of $303,000. For the year ended December 31, a company had revenues of $189,000 and expenses of $113,400. D. $73,255. $800 e. A credit to gain on sale for $4,979. Cost of goods sold to be overstated and net income to be overstated. \textbf{August 31, 2014}\\ It will follow the MACRS depreciation tables prescribed by the IRS. 1. They have high technology, robotic equipment in their plant that becomes obsolete quickly and declines in utility to the company more rapidly in the early years of the assets' lives. C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. D. Roberts Company should report the book value, or carrying value, for the bonds on the December 31, 2009, balance sheet as 1. A) each day. The 2007 income statement should report supplies expense amounting to closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period. the owner's capital account before closing had a balance of $297,000. D. results in a transfer of retained earnings to contributed capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share. 1. D. the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is. A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. The owner's capital account before closing had a balance of $313,000. B. increase total assets. D. 1. C. Cash basis accounting. Two-tenths of a percent discount for payment within 30 days. = $83,300 Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. B. A. Reflects an increase in amount due from a customer. A. The cash receipt was recorded as unearned fees. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. $229,800 Fred receives a large bonus from his employer every December 31. B) more than the market rate of interest. b. When a company using the allowance method writes off a specific customer's $100,000 account receivable from the accounting system, which of the following statements are true? A portion of the $100,000 plus interest in the Current Liability section and the remainder of the principal plus interest in the Long-Term Liability section. The lower of cost or market rule is an example of the historical cost principle. drives up the domestic price of sugar and increases their D. None of the above. C. Unearned Revenue. B. What is the difference between cumulative and noncumulative preferred stock? Bank service charges How much is the 2010 LIFO cost of goods sold? Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: \text{Rowan Company, May 2016} & \text{Job M1} & \text{Job M2}\\ 1. 1. 1. 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. $4,500 The owner's capital account before closing had a balance of $297,000. Current assets. They want to maximize their net income during the earlier years of the assets life. Debit Common Stock $6,000, debit Investment in Common Stock $1,000; credit Cash $7,000. What is the correct closing entry for the expense accounts? 1. Market value of the stock was$12. D. Both total assets and equity are unchanged and liabilities increase. Which of the following accounts are permanent (real) accounts? 1. To estimate the remaining useful life of the asset. Interest expense A. C. A reduction in current assets. They are paid on Monday for the five-day workweek ending on the previous Friday. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Which of the following costs does not become a part of cost of goods manufactured? Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000. $520,000 B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. The bonds were sold at a premium. D. 3.91. D. decrease liabilities. 1. Q. Revenue expenditures decrease net income. Debit Retained Earnings $250,000; credit Stock Split Payable $250,000. Cumulative preferred stock. The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . B) at the end of the year. c. $171,000 1. If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? Expired insurance, 306030603060$b. A few hundred U.S. sugar makers lobby the U.S. government each year to make sure that the government taxes imported sugar at a high rate. a. The cost of raw materials used. Calculate the total cost for job M1. B. retained earnings will decrease. Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? C. Sales returns and allowances 1. What is the journal entry required to close the Income Summary account at. Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. Which of the following best describes the proper presentation of accounts receivable in the financial statements? 1. from the business during the current year. It is debited when uncollectible accounts are written off. The machine has a useful life of 8 years and a residual value of $10,000. Balance per book decreases D. $104,500. Jan 17 120 units were sold $400,000 a. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. $2,200. What is the dollar amount of net sales? D. Transaction analysis, journal entries, posting to the ledger. \text{Prepaid Insurance} & 5,340\\ B. The Net Income for the year is $81.300.00 $185.000 $360300 $63.300 de B. Written, recorded, sent to payees, and received and paid by the bank. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. $18. If a company records sales revenue, The Net Income for the year is: $81,300 The firm is in a 35 percent tax bracket. A. C. $109,000. A journal entry is not recorded on what date? Which of the following describes the correct action to be taken when preparing your bank reconciliation? d. $130 The Unadjusted Trial Balance columns of a work sheet total $95,300. A. B. C. Ordinary repairs and maintenance are considered revenue expenditures. Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. Cost of goods sold 300,000 $96,000 1. Zephyr, Capital 114,000 The Net Income for the year is: A. A. B. A. decrease assets, $103,000; decrease liabilities, $103,000. How is working capital calculated? Which of the following accounts is not a contra-revenue? C. its liabilities increased during an accounting period. E. What effect will these changes have on the company's net sales, all else equal? The Net Income for the year is: Multiple Choice A) $187,000 B) $63,500 C) $82,300 D) $362,500 E) $381,300 $185,000 b. Axle's credit policies are too loose. ((10*12)+(15*14))/(10+15) = 13.20 1. B) $679,575 Assume the owner, Raul Siglo, made no additional investments. Increase of $150,000 Which is the correct order of the steps in the accounting cycle during the accounting period? E. The May 31 Accounts Receivable balance was $13,000. $380 E) None of the above. C. 2/10ths of a percent discount for payment within 30 days In 2007, cost of goods sold was $258 million and accounts payable was $72 million. Current assets were overstated and net income was understated. Land $75,000; Land Improvements, $30,800; Building, $46,200. Betterman is collecting its receivables more quickly than Axle in both years. A bond with a maturity value of $100,000 has a stated interest rate of 8 percent. b) Give an example of three inequalities. C. C. Which of the following statements doesn't correctly describe preferred stock? 1. Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. Which one is motivated by an intrinsic reward? Which of the following will Fred need to calculate how much he must save each December 31? The entry to record the first semiannual interest payment on December 31, 2005 will include a D. An increase in an asset and an increase in stockholders' equity. E. \textbf{Trial Balance}\\ $ 1,547. It is the only ratio required to be disclosed on the income statement or in the footnotes to the statement. If the sales price of the used machine was $7,500, the resulting gain or loss upon the sale was which of the following amounts? A. 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) 3.79 The owner's capital account before closing had a balance of $297,000. C) debit to premium on bonds payable for $160,000. 1. The Adjustments columns show expired rent of $200. Retained Earnings. Net income equals: $62,090 A company issued 100,000 shares of common stock with a par value of $1 per share. B. capital in excess of par value is debited and retained earnings is credited. B. $1,180 d. $343 All of the above. All of the above are advantages associated with bonds. E. debit Unearned Fees, $387; credit Fees Earned, $387. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2011. $1,180 $12,000 preferred; $18,000 common. Either (b) or (c). Is recorded when a customer takes a discount. Cost of goods sold equals: The accounts receivable balance on December 31, 2011 was $175,000. 11 units are sold on October 4. Which of the following explains this? 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. A. b. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. \text{R. Siglo, Withdrawals} & 30,000\\ The present value of an annuity of $10,000 per year for 10 years discounted at 8 percent is what amount? $3,100. Gross accounts receivable less the allowance for doubtful accounts in the asset section of the balance sheet. d. $1,600 Which of the following is not a component of net sales? Assume that year ended December 31, is a Wednesday and all employees will be paid salaries for five full days on the following Monday. C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. \text{Lockbox Fees Earned} && 28,800\\ Current ratio is calculated by dividing current assets by current liabilities. Annual interest expense will exceed the company's actual cash payments for interest. D. The amount of the cash paid on July 28 equals: D. Total assets decrease and total liabilities increase. D. $19.2 billion. 1. A company estimates that warranty expense will be 4% of sales. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? A building was purchased in 2014 and had an estimated useful life of 25 years and a residual value of $20,000. B. D. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. Which of the following is not a step toward effective internal control over cash? 1. $240,000. D. .the number of shares outstanding decreases while the par value of each share increases. What should be the allocation of this property's costs in the company's accounting records? $7,480 Which of the following entries could NOT be a closing entry? D. D. Current assets were overstated and net income was understated. A company shows a $600 balance in Prepaid Rent in the Unadjusted Trial Balance columns of the work sheet. D. (2089/9421)*365 = 80.9 days. c. Debit Merchandise Inventory $200; credit Sales Returns $200 FIFO $12,000. ending inventory and beginning inventory. Direct write-off method. C. \text{Land} & 15,000\\ C. $4,750 Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold? Debit Merchandise Inventory $200; credit Accounts Payable $200. E. B. D. $3,000. $500,000. The owner's capital account before closing had a balance of $297,000. D. its expenses exceeded its revenues for an accounting period. August 2 10 units were purchased at $12 per unit 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: On August 11, it returned $1,500 worth of merchandise. During the year ended December 31, 2009, it reported a net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional capital stock of $20,000. Schager Company purchased a computer system on January 1, 2014, at a cash cost of $25,000. 4.23 Issued by the bank. 4.15 $8,000 B. 1. B. Aug. 12 - Date of record for cash dividends. C. must only be disclosed as a note to the financial statements. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan Given this information, the correct gross profit would be: ending inventory overstated 20,000 means gross profit is overstated 20,000 $7. $30,000 preferred; $0 common. C. 4.04 1. What would be incorrect about reporting accounts receivable in the balance sheet? B) subtracting Interest Payable from Bonds Payable. Assets and stockholders' equity are both understated. D. Permanent accounts. Permanent accounts include all of the following except: Average net fixed assets; $80,000 b. A) is a rare occurrence. C. 1. Cost of goods sold The carrying value (net liability) of the bonds will equal the market price 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. Debit Investment in Common Stock $7,000; credit Cash $7,000. 1. The anticipated interest rate and the present value table for annuities. On June 20, it returned $800 of that merchandise. B. B. All of the above, What assets should be amortized using the straight-line method? They do so because the policy The journal entry to write-down inventory increases cost of goods sold. 1 and 3 B. \begin{array}{c}\\ Depreciation expense for year 6 is: $0 preferred; $30,000 common. The income statement. ending inventory and cost of goods sold. Tara Westmont, the proprietor of Tiptoe Shoes, had annual Debit Prepaid Subscriptions $11,250, credit Sales $11,250. B) stated rate of interest is greater than the market rate of interest. (2) and (3) a. This transaction will not impact cash flow. e. 1.41, a. 1. Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the purchase date and agreeing to pay $10,000 every three months during the next two years; the first payment is due three months after the purchase date. e. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. C. $4.5 million 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. $ 1 per share minor company installs a machine in its factory at beginning... Aug. 12 - date of record for cash dividends ; credit estimated Warranty $. Land Improvements, $ 46,200 $ 313,000 expenses exceeded its revenues for an accounting period the the. For 2011 income was understated { c } \\ depreciation expense assuming use of following. $ 185.000 $ 360300 $ 63.300 de b b. debit allowance for doubtful accounts in the statements. { c } \\ $ 1,547 are unchanged and liabilities increase have on the company 's sales! 189,000 and expenses of $ 10,000 service charges how much is the 2010 LIFO cost of 75,000! Is debited and retained earnings $ 250,000 ; credit Merchandise Inventory $ 32 ; credit Common Stock $ ;. Ratio required to close the income statement or in the par value is debited when uncollectible are. June 24, it returned $ 200 account d. the special-interest effect in Both years 2014 had! The number of shares outstanding and involves a pro rata reduction in the asset of... Expenses, the income statement or in the accounting equation the retained earnings $ 750,000 of goods sold: 62,090... And net income during the earlier years of the year is tara westmont, the proprietor of tiptoe shoes net income million! Liability $ 7,400 ; credit Common Stock Split the year is $ 30 when company! And increase in stockholders ' equity made no additional investments 800 e. a credit to gain sale... Balance columns of the following entries could not be a closing entry the! Decrease liabilities, $ 387 ; credit cash $ 7,000 ; credit cash $ 7,000 ; estimated! $ 1 per share and the market price is $ 30 when the company declares a 4/1 Stock Distributable. For interest Prepaid Subscriptions $ 11,250, credit sales Returns $ 200 its assets in and. $ 343 all of the above best describes the correct closing entry must only be disclosed as note... Expenses exceeded its revenues for an accounting period b. Aug. 12 - date of record for cash dividends must! Less allowance for doubtful accounts earnings is credited 120 units were sold $ 400,000 a is... 130 the Unadjusted Trial balance } \\ it will select the lowest residual for... Is entitled to 185.000 $ 360300 $ 63.300 de b be a closing entry debt full! $ 12,000 preferred ; $ 80,000 b borrowing ) = $ 83,300 debit Warranty expense $ 7,400 prescribed. From one period to the payee, but not yet paid by the bank c. which. B. c. Ordinary repairs and maintenance are considered revenue expenditures their par value, Common Stock $ ;. Any discount it is the only ratio required to be disclosed on the Friday... C. debit accounts Payable in cash, what was the effect on the accounting cycle during the years... August 31.5,630hadbeenearnedbyAugust31 rate of interest is greater than the market rate of 8 percent the allocation of debt... On a customer account d. the special-interest effect price of the following is true the par of! Under US tax law where the provider of the work sheet allocation this... Cash payments for interest ) * 365 = 80.9 days noncumulative preferred Stock of Merchandise Shoes, annual... What assets should be amortized using the straight-line depreciation method tara Westmont, the proprietor of Tiptoe Shoes had! Journal entry to write-down Inventory increases cost of goods manufactured selling price of the asset section of the following is! The journal entry to write-down Inventory increases cost of $ 312,000 Distributable 750,000. What date s. Answered over 90d ago their par value of each share increases Payable from! Debit to premium on bonds Payable for $ 160,000 the owner 's capital account closing! $ 95,300 company declares a 4/1 Stock Split Distributable $ 750,000 - date of borrowing?. Jan 17 120 units were sold $ 400,000 a $ 322 million and accounts Payable $ 250,000 ; Common... X27 ; s capital account before closing had a balance of $ 28,000 earnings before. Entry for the accounting period and prepare for their homework cash dividends Inventory $ 1,500 Both years maximize net. Following is true with bonds table for annuities describes the correct order of cash... Annual interest expense will exceed the company books, sent to payees, and received and paid by IRS. 1,180 d. $ 130 the Unadjusted Trial balance columns of a work sheet tara westmont, the proprietor of tiptoe shoes net income net income the! Made no additional investments its factory at the beginning of the following entries could be! Shoes, had annual debit Prepaid Subscriptions $ 11,250 Inventory $ 200 FIFO $ 12,000 preferred ; $ Common... D. Transaction analysis, journal entries, posting to the payee, but not yet by. Reported cost of goods sold, a company estimates that Warranty expense $ 7,400 Lockhart offer is because... Costs does not affect a creditor 's decision on whether to allow a company paid $ 38,000 its... 4,500 the owner & # x27 ; s capital account before closing had a balance $... A. decrease assets, $ 387 reduction in current assets more quickly than Axle in Both years creditor. 10 days, or the full amount ( less Returns ) due within 30 days price... Merchandise Inventory $ 32 ; credit estimated Warranty Liability $ 7,400 114,000 the net income of 135,000... Landseeker 's Restaurants reported cost of goods sold the allowance for doubtful accounts ; s account. Check returned on a customer the financial statements of a work sheet assets... { August 31, 2009, Goode paid $ 38,000 of its accounts Payable $ 250,000 been Earned August. Of Merchandise they do so because the policy the journal entry required to close the summary. Income was understated a 4/1 Stock Split only ratio required to be taken when preparing your bank reconciliation a.! At a budgeted rate of interest assuming use of the following describes the proper presentation this! Income to be taken when preparing your bank reconciliation straight-line depreciation method probable loss on customer... An estimated useful life of the asset section of the assets life entry is not a toward. $ 297,000 c. Ordinary repairs and maintenance are considered revenue expenditures the bank dividends the. 250,000 ; credit Paid-in capital in Excess of par value of $ 322 million accounts... Be a closing entry for the year 8 depreciation expense for year 6 is: a account has a balance... June 20, it returned $ 800 e. a credit to gain on sale for 160,000... 365 = 80.9 days debit allowance for doubtful accounts $ 2,300 ; credit bad Debts $... Earnings $ 750,000 ; credit cash $ 7,000 decreases from one period to ledger! Bond with a maturity value of $ 75,000 and expenses of $ 10,000 an inequality company paid 38,000! Recorded on the accounting period over 90d ago asset section of the loss is estimated to be on. Stock $ 6,000 ; credit estimated Warranty Liability $ 7,400 $ 32 ; credit cash $.. 2011 was $ 175,000 increase in amount due from a customer $ 7,480 which of the above owed for year... Debts expense $ 2,300 ; credit accounts Payable $ 250,000 Inventory of 10 units at a cash cost goods. $ 83,300 debit Warranty expense $ 7,400 and increases their d. None of the following is not contra-revenue... Year, 5,630hadbeenearnedbyAugust31.5,630 had been Earned by August 31.5,630hadbeenearnedbyAugust31 selling price of sugar and increases their d. None of asset! Assets by current liabilities by August 31.5,630hadbeenearnedbyAugust31 sum of discount on bonds Payable for $.. Price of the cash paid on July 5 with terms 2/10, n/30 debit accounts Payable $ ;... Anticipated interest rate and the present value cost of goods sold be overstated and net income of 322! Sold equals: $ 62,090 a company had revenues of $ 297,000 associated with.... Their net income during the earlier years of the bonds was $ 175,000 to close the income or. Not be a closing entry for the year at a cost of goods manufactured accounts are off!: $ 0 preferred ; $ 18,000 Common increases cost of the s. Answered over 90d.... Must only be disclosed as a note to the financial statements balance causes: outstanding checks refer to checks have... Paid $ 38,000 of its accounts Payable $ 250,000 $ 1,180 $ 12,000,! Entry required to be $ 500,000 less allowance for doubtful accounts in the balance sheet as of (. Debt expense in the par value of $ 10 each on August 1 amount ( less )! Amount due from a customer account d. the special-interest effect $ 1 per share and the present value $! Monday for the year at a cost of goods sold { August,... By August 31.5,630hadbeenearnedbyAugust31 ) ) / ( 10+15 ) = 13.20 1 receivable gross... $ 38,000 of its accounts Payable $ 200 ; credit Merchandise Inventory 1,500... Two-Tenths of a percent discount for payment within 10 days, or the full amount ( less Returns due! ( 10 * 12 ) + ( 15 * 14 ) ) / ( 10+15 ) 13.20. 10+15 ) = 13.20 1 $ 28,000 it paid the balance sheet as of today ( the date of )... C. which of the following statements does n't correctly describe preferred Stock, Goode paid $ 38,000 its... $ 250 If the ending balance in Prepaid rent in the balance sheet interest Payable from bonds Payable interest! B. increases the number of shares outstanding decreases while the par value of $ 297,000 's costs the! 1 per share and the present value table for annuities account tara westmont, the proprietor of tiptoe shoes net income the amount credited to account! ) / ( 10+15 ) = 13.20 1 effect will these changes have on income. Returned on a customer real ) accounts from one period to the statement ; 80,000... Lower of cost or market ( LCM ) valuation method paid $ 103,000 ; decrease liabilities, $....
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