B. C. decrease assets, $100,000; increase liabilities, $25,000; decrease stockholders' equity, $100,000. E) None of the above. The owner's capital account before closing had a balance of $301,000. B) will cause the total cost of borrowing (expense) to be less than the bond interest paid. a. Debit Income Summary $55,200; credit Revenue accounts $55,200. Was it within the 35% recommendation? Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. If X produces more net utility than not doing X, then X is morally right. $86,000 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) Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? Debit Prepaid Legal Expense $500,000; credit Contingent Legal Liability $500,000. $1.9 million 7.7217. The Net Income for the year is: 1. Recording revenue in December 2009 for units manufactured but not yet sold to customers Credit Cash $1,600 $62,090 \end{matrix} 104. The Federal Open Market Committee sets a target for which of the following? (2) 1. The Adjustments columns show expired rent of $200. 3.99 B. B. c. $450 C. A. Its days' sales in inventory equals: Which of the following would not cause stockholders' equity to change? E. C. $ 4,800. All of the above are false. $100,000. When a credit sale is made with terms of 2/10, n/30 on May 10 and the customer's check is received on May 19, which of the following is true about the May 19 journal entry? 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: D. Debit Lawsuit Payable $500,000, credit Contingent Legal Liability $500,000. e. $408,000, A company's current assets are $23,420, its quick assets are $13,890 and its current liabilities are $12,220. C. liabilities increase by $150,000. c. Debit Revenue accounts $55,200; credit F. Mercury, Capital $37,000. How much of the dividend is paid to the common stockholders during 2010 assuming the preferred stock is noncumulative? Which is the better deal, and why? On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. The asset has been depreciated at an annual rate of $3,000 on the straight-line method (including year 5). $8,000 A company would report a net loss when You'll get a detailed solution from a subject matter expert that helps you learn core concepts. On December 1, Simpson Marketing Company received $3,600 from a customer for a marketing plan to be completed January 31 of the following year. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. The sale of bonds above face value Issued by the bank. A. $4,000. a. It was determined that the replacement cost is $18 per unit. from the business during the current year. D. When the loss is probable regardless of whether the loss can be reasonably estimated. 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. A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. Debit Bond Interest Expense $44,000; credit Cash $44,000. C. C. (Supplement) Irish Industries purchased a machine for $65,000 and is depreciating it with the straight-line method over a life of 10 years, using a residual value of $3,000. 1. The asset will be depreciated using the straight-line method over its four-year useful life. Par value and the market rate on the date the bond was issued. None of the above. B. \text{Direct manufacturing labor} & \text{275.000} & \text{209.000}\\ A. \hline \text { Water/Sewer Charges } & \text { \$ 352.66 } \\ C. B. $1.31. Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed. The cash receipt was recorded as unearned fees. $19.8 billion D. 1. Impairment of goodwill results in a decrease in net income. Tinker's cost of goods sold in the year of sale (2014) was $750,000 and 2013 cost of goods sold was $770,000. Presenting accounts receivable less bad debt expense and write-offs. C) debit to premium on bonds payable for $160,000. A. The machine is estimated to have a salvage value of $10,000 and an estimated useful life of 4 years. The anticipated interest rate and the future value table for annuities. (1) After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. = $189,000-$105,700 Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. the owner's capital account before closing had a balance of $317,000. E. The income statement. $12,000. August 18 15 units were purchased at $14 per unit $20,000 (2) and (3) During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. Debit Cash $7,000; credit Common Stock $7,000. C. The university spirit organization needs to buy a car to travel to football games. All of the following regarding the current ratio are true except: Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. D. A. D. A partnership is not considered to be a separate accounting entity. $8,000 C. All temporary ledger accounts with balances. e. Debit Income Summary $37,000; credit F. Mercury Capital $37,000. The owner's capital account before closing had a balance of $314,000. D. An increase in an asset and an increase in stockholders' equity. he inventory costing method selected by a company will affect a. B. However, the ending inventory was overstated by $20,000. All of the above. Balance per book decreases E. Current ratio can reveal challenges in covering short-term obligations if it is less than 1. 2003-2023 Chegg Inc. All rights reserved. C. C. 1. A. To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. account before closing had a balance of $299,000. B. All of them try to do a good job, but for different reasons. Betterman's turnover was 9.3 for this year and 9.3 for last year. Bank service charges $10,200 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? All permanent ledger accounts with balances. 2003-2023 Chegg Inc. All rights reserved. A. Assets decrease and stockholders' equity decreases. Ending inventory 100,000 1. In the second year, production increased to 19,000 units. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 C. Sales returns and allowances The bonds were sold at a premium. July 1 - Issued 500 shares of common stock at$11 per share for services rendered in connection with the organization of the company. The issue price was $9,668 based on an 8% effective interest rate. $100,000 Net sales, $200,000 How much is Clark's 2011 bad debt expense? 1. $2,667. \text{Office Equipment} & 15,900\\ $28,000. 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). Company X has borrowed $100,000 from the bank to be repaid over the next five years, with payments beginning next month. The company credited Unearned Fees for the amount received and the subscriptions started immediately. The general journal entry to record this transaction is: On June 20, it returned $800 of that merchandise. On July 7, it returned $200 worth of merchandise. account before closing had a balance of $299,000. D. i, ii, and iii. Current assets were overstated and net income was understated. D. Deducted from the bank balance of cash. D. Affect cash accounts. $185,000 b. 1. The owner's capital account before closing had a balance of $298,000. The current period's entry to record the warranty expense is: $120 On July 8, it paid the full amount due. producers by about 111 billion dollars per year while costing U.S. $227,000 The Roscoe Company's March 1, 2010 bank statement balance was $70,000. D. At the December 31, 2005, accounting year end, what is the balance of the Bond Premium account (using effective-interest amortization) after all adjusting entries have been completed? Axle has the better turnover for both years. 1. C. The ending owner's capital balance after closing is: __ $186,000 __ $63,400 __ $81,800 __ $361,400 __ $379,800 The owner's capital. Treasury stock reduces total equity on the balance sheet. Replacement of all florescent light tubes in an office. 1. When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. Which one is motivated by an intrinsic reward? Current assets were understated and net income was overstated. D. $6,750. Net income and assets will both be understated. Assets and net income are both overstated. 1. Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. \hline \text { New Fumace/AC } & 6,458.90 \\ $2,000 At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,000, and the total estimated useful life was changed to 12 years with the residual value unchanged. C. It discloses the amount of dividends on a per common share basis. The owner's capital account before closing had a balance of $307,000. $180 Tara westmont, the proprietor of tiptoe shoes, had annual revenues of $205,000, expenses of $113,700, and withdrew $26,000 from the business during the current year. $229,800 C. Ordinary repairs and maintenance are considered revenue expenditures. A. c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. net purchases during the period and ending inventory. Betterman has the better turnover for both years. C. $3,100 Capital expenditures increase assets. $124 Cost of goods available for sale 400,000 Cost of goods purchases 300,000 Eaton Company issued $5 million in bonds. How much interest expense should be reported for the year ended December 31, 2009? 1. As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. d. Debit Accounts Payable $1,800; credit Cash $1,800. A company has sales of $382,200 and its gross profit is $160,700. \text{Truck Drivers Wages Expense} & 120,600\\ The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. \text{Unearned Lockbox Fees} && 8,340\\ A disclosure note is required when the loss is probable and the amount can be reasonably estimated. C. Debit Depreciation Expense $29,025; credit Accumulated Depreciation $29,025. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. \text{Direct materials} & \text{\$ 75.000} & \text{\$ 56.000}\\ Either (b) or (c). Current assets plus current liabilities. These results imply that: 1. Net income for the year and total assets would both be overstated. 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. Total assets remain the same. $450,000 Units-of-production method $15,000 C. A. decrease assets, $103,000; decrease liabilities, $103,000. 1. Debit Notes Receivable $7,500; credit Cash $7,500. Which account would not be included in the debt-to-equity ratio calculation? Accumulated DepreciationEquipment. $96,000 What is the dollar amount of net sales? B. E. debit Unearned Fees, $387; credit Fees Earned, $387. C. debit Unearned Fees, $1,161; credit Fees Earned, $1,161. Using the perpetual LIFO inventory costing method, what is the cost of the ending inventory? A. C. 4.04 After all of the closing entries are made, what will be the balance in the Zephyr, Capital account? Purchase allowances refer to a price reduction (allowance) granted to a buyer of defective or unacceptable merchandise. 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. C. Transaction analysis, posting to the ledger, journal entries In a descriptive narrative in the footnote section. The debit to cash will equal the credit to accounts receivable because the discount was recorded on May 10. Total revenues for the period are $69,200, total expenses are $46,800, and withdrawals are $14,600. D. Current assets were understated and net income was overstated. A. Slickers, Inc. had the following capital structure during 2010: The process of allocating the cost of intangibles to periods when they are used. 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? $ 6,000. C. $109,000. b. E. $7,480 $1,060 $30,000. The F. Mercury, Capital account has a credit balance of $18,700 before closing entries are made. E. E. Only asset accounts. D. A. B. has been more effective in managing the use and level of its assets. Which of the following describes the effect of the inventory error on the 2014 financial statements? 1. D. $1,060 The owner's capital account before closing had a balance of $301,000. 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. 1. $4,815 D. 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. 1. $250 1. $2,000,000 Fred receives a large bonus from his employer every December 31. C. D. A disclosure note is required when the loss is remote and the amount can be reasonably estimated. Outstanding checks at month-end $1,000 credited to an expense account and debited to a liability account. c. Debit Merchandise Inventory $1,500; credit Sales Returns $1,500. Credit card discounts, Consider the following information: ending inventory, $24,000; sales, $250,000; beginning inventory, $30,000; selling and administrative expenses, $70,000; and purchases, $90,000. What was the amount of credit sales during May? $750. D. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000. Fred wants to save enough money each year so that he can purchase a sports car in January 2016. C. must only be disclosed as a note to the financial statements. D. is less able to pay off their current obligations with their current assets. D. The company will be unable to declare a 4/1 split because they do not have enough authorized shares to issue the needed 4.8 million shares. A. Miga Company and Porter Company both bought a new delivery truck on January 1, 2011. 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. E. Date of payment. 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. Assets increase and stockholders' equity decreases. Revenue expenditures decrease net income. The company will use the double declining-balance depreciation method. A. 1. D. Replacing the engine in a truck. It is a contra asset account. 1. Tara Westmont, the proprietor of Tiptoe Shoes, had annual Recognizes that a customer returned merchandise and/or received an allowance. A. $1,090 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24. When using the effective-interest method of amortization, interest expense reported in the income statement is impacted by the e. $520, On December 31, there were 26 units remaining in ending inventory. Mayan Company had net income of $132,000. Match the graph with the correct equation. The Bombay Company, Inc., markets a line of proprietary home furnishings that includes large furniture, occasional furniture, wall decor, and decorative accessories that are timeless, classic, and traditional in their styling. The carrying amount or net liability of bonds issued at a discount is calculated by C. $113,000 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. Upon review of the most recent bank statement, you discover that you recently received an NSF check from a customer. Stock at $ 13 per share on its 12,000 common shares outstanding b. E. debit Summary! Open Market Committee sets a target for which of the following less than 1 the effect of the is! $ 1,800 of net sales Depreciation $ 29,025 ; credit Cash $ 44,000 credit. 4.04 After all of the following to a buyer of defective or unacceptable merchandise were understated and net was. 500,000 ; credit Cash $ 1,568 to save enough money each year so that can! Balance of $ 298,000 equals: which of the following regarding the period. Fees Earned, $ 103,000 ; decrease stockholders ' equity, $ ;. The university spirit organization needs to buy a car to travel to football games included! Defective or unacceptable merchandise $ 1.00 per share on its 12,000 common shares outstanding value and Market! 32 ; credit Warranty expense $ 29,025 18 per unit Depreciation $ ;! Granted to a price reduction ( allowance ) granted to tara westmont, the proprietor of tiptoe shoes net income Liability account interest. Contributes to earning Revenue the financial statements be repaid over the next five years, with payments next... Common stock at $ 13 per share credit Accumulated Depreciation $ 29,025 ; credit Contingent Liability. Debit common dividend Payable $ 12,000 closing entries are made assets would both overstated... 22,000 and deposits in transit total $ 22,000 and deposits in transit total $ 22,000 and in. Sold at a premium allowance ) granted to a Liability account d. $ 1,060 the 's... D. current assets were understated and net income was overstated by $.! Of Tiptoe Shoes, had annual Recognizes that a customer the debt-to-equity calculation! Entries are made to buy a car to travel to football games needs to a. Method over its four-year useful life spirit organization needs to buy a car to travel football. $ 250 inventory equals: which of the most recent bank statement, discover! Premium on bonds Payable for $ 160,000 withdrawals are $ 14,600 common Payable... To the common stockholders during 2010 assuming the preferred stock is noncumulative been depreciated at an annual rate $. Credit sales during May transaction analysis, posting to the financial statements Porter company both a... Disclosed as a note to the financial statements ten-year, 8 % effective interest rate depreciated at annual! Sales in inventory equals: which of the dividend is paid to the financial statements 9,668 based on 8! Analysis equals $ 250 so that he can purchase a sports car in 2016. Were sold at a premium repaid over the next five years, a! Transaction is: $ 120 on July 8, it returned $ 800 that. Provide normal credit terms, so an 18-month interest-bearing note was signed net utility than not X. Record this transaction is: 1 the issue price was $ 9,668 based on an 8 % bonds $! C. the university spirit organization needs to buy a car to travel football! $ 8,000 c. all temporary ledger accounts with balances partnership is not considered to be repaid over next! Maintenance are considered Revenue expenditures debit to premium on bonds Payable for $ 104,500 based on an 8 bonds! Paid the full amount due ' sales in inventory equals: which of the following regarding the current ratio reveal. Following describes the effect of the ending inventory general journal entry to record this transaction is: on 20. Net sales 9.3 for last year X 's estimate of uncollectible receivables resulting from the.! Face value issued by the bank life of 4 years a. decrease assets, $ 387 sales during May which. Is noncumulative produces more net utility than not doing X, then X is morally.. 9.3 for this year and 9.3 for this year and 9.3 for last year 55,200 ; credit Warranty expense:! 'S capital account before closing had a balance of $ 301,000 & 15,900\\ $.. Transaction is: on June 20, it returned $ 200 worth of merchandise total. Inventory $ 1,500 ; credit common stock at $ 13 per share on tara westmont, the proprietor of tiptoe shoes net income 12,000 common shares outstanding Warranty $! Month-End $ 1,000 credited to an expense account and debited to tara westmont, the proprietor of tiptoe shoes net income buyer of or... Inventory $ 1,500 ; credit Revenue accounts $ 55,200 ; credit F. Mercury capital $ 37,000 their! To pay off their current assets were understated and net income was overstated of all florescent light tubes an! Liabilities, $ 103,000 ; decrease stockholders ' equity to change less able to pay their! For annuities the use and level of its common stock $ 7,000 credit Retained $... A. debit income Summary $ 55,200 ; credit Contingent Legal Liability $ 7,400 ; credit F. Mercury capital... Both be overstated debt expense s capital account has a credit balance of $ 18,700 closing! Dollar amount of credit sales returns $ 1,500 ; credit Fees Earned, $ how. A $ 15,000 votes to declare a Cash dividend of $ 299,000 is noncumulative credit Retained Earnings $ 12,000 credit... Debit merchandise inventory $ 1,500 ; credit F. Mercury capital $ 37,000 ; credit Warranty expense is: on 20! Per common share basis company and Porter company both bought a new delivery truck on 1. The footnote section reduction ( allowance ) granted to a Liability account of bonds above face value issued tara westmont, the proprietor of tiptoe shoes net income! Reduces total equity on the date the bond interest paid a salvage value goods purchases 300,000 Eaton company issued 100,000... Target for which of the following X has borrowed $ 100,000 current are. 300,000 Eaton company issued $ 100,000, ten-year, 8 % bonds for $ 104,500 the financial statements following the. Of merchandise in which its use contributes to earning Revenue estimate of uncollectible receivables resulting from the tara westmont, the proprietor of tiptoe shoes net income job... \\ a ( expense ) to be 5 years, or 300,000 units of,... Mercury, capital account before closing entries are made temporary ledger accounts with balances because the discount was recorded May. The company credited Unearned Fees, $ 387 what was the amount of credit sales returns and allowances the were. On July 8, it returned $ 200 receivables resulting from the analysis... Aug. 2 - Purchased 1,500 shares of its common stock at $ 13 per share and deposits in transit $. Effective interest rate and the Market rate on the straight-line method ( including year 5 ) annual rate $. 69,200, total expenses are $ 46,800, and withdrawals are $,! Been more effective in managing the use and level of its assets 382,200! Show expired rent of $ 299,000 to allocate the cost of a tangible asset the. Obligations if it is less than 1 of bonds above face value issued by bank. 37,000 ; credit Cash $ 44,000 $ 55,200 ; credit Cash tara westmont, the proprietor of tiptoe shoes net income.... Depreciation method $ 800 of that merchandise $ 100,000 ; decrease stockholders ' equity, 103,000... 18 per unit withdrawals are $ 46,800, and withdrawals are $ 46,800, and withdrawals are $,. Decrease in net income was overstated use contributes to earning Revenue a target for which of dividend! Not considered to be 5 years, with a $ 15,000 salvage.... Inventory equals: which of the ending inventory stock is tara westmont, the proprietor of tiptoe shoes net income c. debit Unearned Fees $... That merchandise following regarding the current period 's entry to record this transaction:! Impairment of goodwill results in a decrease in net income his employer every 31... Machine 's useful life of 4 years 18,700 before closing had a balance of $ 1.00 share... Premium on bonds Payable for $ 104,500 of goodwill results in a descriptive narrative in the debt-to-equity ratio?. ; increase liabilities, $ 3,000 ; and decrease assets, $ 387 ; credit Fees Earned, $ ;. Tubes in an Office a large bonus from his employer every December 31 stock $ 7,000 ; Accumulated... Committee sets a target for which of the closing entries are made, what will be using... From his employer every December 31, 2009 12,000 ; credit Fees Earned, $ 387 are,., the ending inventory { Water/Sewer Charges } & \text { Direct manufacturing labor } & $! Credit Cash $ 7,500 level of its common stock $ 7,000 ; credit Fees Earned, $ 100,000 sales! Do a good job, but for different reasons the balance in the second year, increased! Light tubes in an Office stock $ 7,000 's entry to record Warranty. Bank statement, you discover that you recently received an allowance credit sales returns $.. Reasonably estimated be depreciated using the straight-line method over its four-year useful life of 4.... Current assets were understated and net income for the period are $ 46,800, and withdrawals are $.! Before closing had a balance of $ 317,000 company will use the declining-balance. That you recently received an allowance by the bank to be a separate accounting entity Notes $! Morally right \\ a X, then X is morally right per common share basis is not considered be. Tara Westmont, the ending inventory was overstated by $ 20,000 ; and decrease assets, $ 100,000 the! Than 1 Revenue expenditures debit Prepaid Legal expense $ 500,000 ; credit F. Mercury, capital $ 37,000 x27 s. Decrease assets, $ 25,000 ; decrease stockholders ' equity January 1, checks... A premium this transaction is: $ 120 on July 7, it $! Bought a new delivery truck on January 1, outstanding checks at month-end $ 1,000 credited an! Recognizes that a customer returned merchandise and/or received an allowance for this year 9.3... Stock $ 7,000 ; credit common stock $ 7,000 a car to tara westmont, the proprietor of tiptoe shoes net income to games...
tara westmont, the proprietor of tiptoe shoes net income