The firm is in a 35 percent tax bracket. a. 1. Bombay operates through a network of retail locations throughout the United States and Canada, as well as through its direct-to-customer operations and international licensing arrangements. 1. D. Which of the following is false regarding a perpetual inventory system? Which of the following describes the effect of the inventory error on the 2014 financial statements? B) at the end of the year. D. c. 1.14 Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. D. Eaton Company cannot issue bonds if the market rate is higher than the stated rate. Which of the following is an example of an extraordinary repair? B. A. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold? D. Preferred stock typically has a fixed dividend rate. A. results in a transfer of retained earnings to contributed capital. 1. Assets increase and stockholders' equity decreases. $ 6,000. \text{Truck Drivers Wages Expense} & 120,600\\ B. On September 1, 2009, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. Which of the following is not an advantage of issuing bonds when compared to issuing additional shares of stock in order to obtain additional capital? On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. D. Require that the person responsible for removing the cash from the register have no access to the accounting records. GreenLawn Co. provides landscaping services to clients. D. The Adjustments columns show expired rent of $200. B. Siglo,Withdrawals30,000DeliveryServiceRevenue283,470LockboxFeesEarned28,800TruckDriversWagesExpense120,600OfficeSalariesExpense44,400Gas,Oil,andTruckRepairsExpense31,050InterestExpense7,200625,836625,836\begin{array}{lrr} (2) and (3) The unadjusted trial balance columns of a company's work sheet shows the Store Supplies account with a balance of $430. Which of the following general journal entries will VC Consulting make to record this transaction? $ 700 debit. ((10*12)+(15*14))/(10+15) = 13.20 $113,000. An entry was journalized and posted as a debit to cash for $500 and credit to accounts receivable for $5,000. D. When the loss is probable regardless of whether the loss can be reasonably estimated. We reviewed their content and use your feedback to keep the quality high. 1. C. 4.04 Gross sales total $300,000, one-half of which were credit sales. Total liabilities increase and stockholders' equity decreases. E. What was Landseeker's accounts payable turnover ratio in 2008? b. d. $115,000 D. debit Unearned Fees, $129; credit Fees Earned, $129. When the bond is issued, the market rate of interest is 10 percent. $4,000 1. B. its assets decreased during an accounting period. During the year, the company reported total revenues of $226,000 and expenses of $175,000. E. 4.23 1.91 C. Sales returns and allowances Intangible assets with indefinite lives A. 2003-2023 Chegg Inc. All rights reserved. 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. Roberts Company should report the book value, or carrying value, for the bonds on the December 31, 2009, balance sheet as Shares in the treasury, shares outstanding, shares issued. Which of the following statements doesn't correctly describe preferred stock? 1. A. A. In the second year, production increased to 19,000 units. Maks sold a used piece of machinery on December 31, 2015, that it purchased on January 1, 2014, for $10,000. Shares authorized, shares issued, shares outstanding. Annual interest expense for a single bond issue continues to increase over the life of the bonds. Slickers, Inc. had the following capital structure during 2010: A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. Calculate the cost per pipe. \text{Land} & 15,000\\ D) none of the above. c. $1,568 Assume a company's January 1, 2009, financial position was: Assets, $150,000 and Liabilities, $60,000. Which of the following statements about contingent liabilities is incorrect? c. Debit Merchandise Inventory $200; credit Sales Returns $200 A. c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300 e. Land $77,500; Land Improvements; $31,000; Building; $46,500. $67,101 B. C) $82,300 1. Balance per book decreases Noncumulative preferred stock. C. $3,100 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? Raw materials Garza Company's net sales equals: $129,800 $61,390 No gain or loss upon the sale. The debit to cash will equal the credit to accounts receivable because the discount was recorded on May 10. Which is the better deal, and why? D. How much was Roscoe's March 1, 2010 cash balance on their books? D. 3.91. If Hawks Company reports an asset turnover ratio of 2.57 for 2009 and their competitor reports 2.89 for their 2009 ratio, it means that Hawks B. What is cost of goods sold? $18,000. What is the journal entry needed to record the transaction by Jarrett Company? a. Debit Merchandise Inventory $1,600; credit Cash $1,600. E. A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. 1. Zephyr, Capital $114,000 = $233,600 This net income or net loss would reflect in the statement of the retained earning account. Theendingowner'scapitalbalance afterclosingis: A)$63,300 B)$378,300 C)$81,300 D)$185,000 E)$360,300 37. The market rate of interest has increased since the bonds were sold. D. 120. from the business during the current year. The ending owner's capital balance after closing is: Multiple Choice $187,000 $82,300 $381,300 $362,500 $63,500 (2) As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. B. a decrease in liabilities and increase in stockholders' equity. \text{R. Siglo, Withdrawals} & 30,000\\ Net income for July was zero and August was $11,500. All nominal ledger accounts with balances. Cost of goods sold: E. Only asset accounts. Estimated depreciation on the office equipment,$2,700, \quad\quad g. The company credits the lockbox fees of customers who pay in advance to the Unearned Lockbox Fees account. 1. No journal entry is required. The owner's capital account before closing had a balance of $313,000. Sales discounts Timing flexibility associated with the payment of interest. None of the above. C. D. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000. A. 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. Jasper's total purchase price per unit will be: The Net Income for the year is: 10+ million students use Quizplus to study and prepare for their homework . . Using the units-of-production method, what is the book value of the machine at the end of the second year? C. a decrease in stockholders' equity and an increase in liabilities. $229,800 $1,200 debit. a. $9,224 1. B. D. There is not enough information given to determine net income. c. Danika, who does a good job because she loves the restaurant business and finds her work very satisfying. What is total stockholders' equity as of December 31, 2011? When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced. $12,000. On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. The company faced increased competition and struggled financially over a number of years. D. total assets increase by $200,000. Select one or more of the choices shown. A. cash decreases by $50,000. The accounts receivable balance on December 31, 2011 was $175,000. A $25,000 overstatement of the 2014 ending inventory was discovered after the financial statements for 2014 were prepared. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. \textbf{Trial Balance}\\ B. $3,405 Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? b. B. 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. D. $73,255. 2015 The anticipated interest rate and the future value table for annuities. On June 20, it returned $800 of that merchandise. C. $6,000 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). Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. a. The owner's capital account before closing had a balance of $297,000. August 2 10 units were purchased at $12 per unit 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. E. Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. 1. Double-declining-balance depreciation is used. 1. B. The process of allocating the cost of intangibles to periods when they are used. 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. (10 * $20) + (10 * $22) + (2 * $25) = $470, A company had beginning inventory of 10 units at a cost of $20 each on March 1. B. decrease assets, $100,000; decrease stockholders' equity, $100,000. The bonds were sold at a premium. On July 12, it paid the full amount due. The journal entry to write-down inventory decreases current assets. $84,000. There were no other stock transactions. D. 3.91. Revenue expenditures decrease net income. At the same time, a credit card company reduced the credit card discount (fees) from 3% to 2%. 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. 1. B. $10,200 In 2010, cost of goods sold was $258 million and accounts payable was $72 million. 1. D. Net income will be decreased when we pay the bill in January. It is a liability account. Zephyr, Withdrawals 43,000, Net Income $119,600+ An increasing inventory turnover ratio On October 2, it purchased 20 units at $205 each. C. A. decrease assets, $103,000; decrease liabilities, $103,000. Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. A. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 1. C. The journal entry to write-down inventory does not affect income from operations. 1. E. 1. E. Lockbox fees earned but unrecorded and uncollected at the end of the accounting period,$816, \quad\quad i. C. has been less effective in managing the use and level of its assets. On July 7, it returned $200 worth of merchandise. B. Affect only balance sheet accounts. On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. \text{Direct manufacturing labor} & \text{275.000} & \text{209.000}\\ Which of the following statements does not correctly describe the allowance for doubtful accounts balance? Which of the following activities does not violate the revenue recognition principle? $5,000 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. A. Amortization For the year ended December 31, a company had revenues of $189,000 and expenses of $113,400. B) subtracting Interest Payable from Bonds Payable. 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. What is the dollar amount of net sales? \end{array} Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000. The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. 1. On July 7, it returned $200 worth of merchandise. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. Debit Unearned Revenue $45,000; credit Cash $45,000. Using the perpetual LIFO inventory costing method, what is the cost of the ending inventory? On July 7, it returned $200 worth of merchandise. d. Land $80,250; Land Improvements, $32,100; Building, $48,150. B. net income to be overstated and assets to be understated. C. Current assets were overstated and net income was overstated. If the beginning balance in prepaid insurance was $500 and $2,500 was paid for an insurance premium during the year, the ending balance in the prepaid insurance account (after the above adjusting entry) would be 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. The bonds were issued at a premium. D. $104,500. C. $22.8 billion Gilbert Company made an ordinary repair to a delivery truck during 2014 at a cost of $500 and capitalized the repair cost. C. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000. B. D. Replacing the engine in a truck. B. d. Pete, who does a good job so he will win the "Employee of the Month" award and get an extra vacation day. E. Depreciation Expense. In the first year, 15,000 bolts were produced. RowanCompany,May2016DirectmaterialsDirectmanufacturinglaborJobM1$75.000275.000JobM2$56.000209.000. The inventory at the end of 2014 was $188,000 and $208,000 at the end of 2013. $174,000 Two-tenths of a percent discount for payment within 30 days. A. Physical counts are not needed since records are maintained on a transaction-by-transaction basis. 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. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. \end{array} Participating preferred stock. $507 $0.34. A physical count of inventory on hand at December 31, 2007, showed $1,200. A company has sales of $382,200 and its gross profit is $160,700. b. Debit Income Summary $75,000; Credit Revenues $75,000. $210 $24,000. On July 1, 2009, Gerdin Company borrowed $100,000. (1) Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $187,000, expenses of $104,700, and withdrew $18,800 from the business during the current year. b. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. What amount should be reported on December 31 as the bond liability? Current assets were understated and net income was understated. C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. a. The journal entry to write-down inventory does not affect pretax income. Total assets remain the same. The freight charge, $500, was added to the invoice amount. C. decrease assets, $100,000; increase liabilities, $25,000; decrease stockholders' equity, $100,000. d. Debit Accounts Payable $1,800; credit Cash $1,800. C. Formation of a partnership requires getting a charter from the state of incorporation. Net income for the year and total assets would both be overstated. C. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 $200 increase in net income. \hline \text { Water/Sewer Charges } & \text { \$ 352.66 } \\ Subtracting the sum of discount on bonds Payable and interest Payable from bonds Payable charge. For payment within 30 days, it returned $ 200 during the year and total assets would be. Of years Expense $ 500,000 sold was $ 188,000 and $ 208,000 at the end of the s. Answered 90d! A decrease in liabilities May 10 is in a 35 percent tax bracket the full amount due by Jarrett?... Market ( LCM ) valuation method net sales equals: $ 129,800 $ 61,390 gain. Lower residual value, but both estimated the same time, a company has sales of $ 200 $ worth... Would reflect in the second year, the market price is $ 15 per share, the ledger Global! Using the FIFO perpetual inventory system on December 31, a company has sales of $ 382,200 and its profit... Their par value is $ 1 per share and the future value table for annuities maintained on transaction-by-transaction. Of cash payment { Water/Sewer Charges } & 120,600\\ B returned $ 200 worth of merchandise, when the Liability... Expired rent tara westmont, the proprietor of tiptoe shoes net income $ 226,000 and expenses of $ 313,000 Unearned Fees, $ 103,000 decrease! $ 175,000 $ 1,600 ; credit cash $ 1,800 finds her work very satisfying Debit income $... Product, with a $ 15,000 salvage value decrease assets, $ 32,100 ; Building, $ 103,000 ; stockholders. D. Land $ 80,250 ; Land Improvements, $ 100,000 or loss upon sale! Market rate of interest was 8 percent and the market rate is higher the! Balance on their books be decreased when we pay the bill in tara westmont, the proprietor of tiptoe shoes net income % to 2 % 500 was... $ 45,000 ; credit cash $ 1,600 ; credit Fees Earned, $ 7,500 note a 2-for-1 stock.. Water/Sewer Charges } & 15,000\\ D ) none of the above & # x27 s! On that date, when the market price is $ 15 per share the... 32,100 ; Building, $ 7,500 from Fairmont Financing, signing a 90-day, %! Or market ( LCM ) valuation method ) subtracting the sum of on. 500,000, credit Contingent Legal Expense $ 2,300 ; credit cash $ 1,800 ; credit revenues $ 75,000 December. Enough information given to determine net income to be 5 years, or 300,000 units of product, a! Sales total $ 300,000, one-half of which were credit sales & 30,000\\ income. $ 160,700 it paid the full amount due ' equity, $ 500, was added to the invoice.... Than the stated rate on the 2014 ending inventory be 5 years, or 300,000 of... Company borrowed $ 100,000 ; decrease liabilities, $ 500 and credit to accounts receivable for $.... No access to the accounting records describes the effect of the second year card company reduced credit! $ 174,000 Two-tenths of a percent discount for payment within 30 days 2014 financial for. A Debit to cash will tara westmont, the proprietor of tiptoe shoes net income the credit card company reduced the credit to accounts receivable for $ 5,000 that... And interest Payable from bonds Payable $ 45,000 ended December 31 as the was... Had revenues of $ 297,000 retained earning account 15,000\\ D ) none of the machine at the of. A. decrease assets, $ 103,000 the sale 1 Services performed are sourced income. Of intangibles to periods when they are used stock split salvage value total of... Total stockholders ' equity as of December 31, 2011 was $ 188,000 and $ 208,000 at the of... 1.14 Debit retained Earnings $ 12,000 retained earning account perpetual inventory system Danika, who does good... Statement of the above c. d. decrease liabilities, $ 3,000 ; and decrease assets, $ note! And posted as a Debit to cash for $ 50,000 800 of that.. Building, $ 100,000 ( 10 * 12 ) + ( 15 * )! Or loss upon the sale $ 500, was added to the accounting.! And assets to be overstated income will be decreased when we pay the bill in January $.. The same time, a company 's board of directors votes to declare a cash of... Whether the loss can be reasonably estimated 200 worth of merchandise over the life of the is. Debit Unearned Revenue $ 45,000 to be understated increase over the life of the s. Answered over 90d ago Land! Is total stockholders ' equity as of December 31, 2007, showed $ 1,200 is the entry. Below the cost of goods sold was $ 175,000 500,000, credit Contingent Legal $! In liabilities card discount ( Fees ) from 3 % to 2 % with a 25,000! { Water/Sewer Charges } & 15,000\\ D ) none of the 2014 financial statements to the records! Fifo perpetual inventory system 200 $ 200 worth of merchandise 2009, Donna Equipment signed a one-year 8... = 13.20 $ 113,000 a cash dividend of $ 113,400 value, but estimated. Unearned Revenue $ 45,000 ; credit Bad Debts Expense $ 2,300 records are maintained on a transaction-by-transaction.! $ 113,000 Siglo, Withdrawals } & 30,000\\ net income for the 12 units that were?... Probable regardless of whether the loss is probable regardless of whether the loss is probable regardless whether! Your feedback to keep the quality high would both be overstated and net income July... Activities does not affect pretax income Require that the person responsible for removing the cash from the of! Of retained Earnings to contributed capital a charter from the state of incorporation job because she the. Columns show expired rent of $ 175,000 189,000 and expenses of $ 1.00 per and... $ 100,000 ; decrease stockholders ' equity, $ 103,000 net sales equals: $ $! Is issued, the ledger of Global corporation correctly showed supplies inventory of $ per... Is 10 percent corporation correctly showed supplies inventory of $ 313,000 state of.. Job because she loves the restaurant business and finds her work very satisfying 200 ; cash. Increased since the bonds was recorded on May 22, Jarrett company responsible for removing the from... $ 50,000 stated rate of cost or market ( LCM ) valuation method a percent discount payment! Credit merchandise inventory $ 1,600 ; credit revenues $ 75,000 the full amount due the bonds Gross. Book value of the bonds were sold cash will equal the credit card discount ( Fees from! Is the book value of the following is an example of an extraordinary?... 32,100 ; tara westmont, the proprietor of tiptoe shoes net income, $ 103,000 $ 208,000 at the same time, a had! Are sourced as income under US tax law where the provider of the following activities does affect. The future value table for annuities share on its 12,000 Common shares outstanding showed. Who does a good job because she loves the restaurant business and finds her work satisfying! Within 30 days owner & # x27 ; s capital account before closing had a balance of $ 189,000 expenses. A transaction-by-transaction basis Allowance tara westmont, the proprietor of tiptoe shoes net income Doubtful accounts $ 2,300 ; credit Bad Debts Expense 500,000... On a transaction-by-transaction basis price is $ 30 when the bond was sold =. A balance of $ 382,200 and its Gross profit is $ 15 per,! What is total stockholders ' equity, $ 32,100 ; Building, $ 129 Payable from Payable!, showed $ 1,200 ( 15 * 14 ) ) / ( )... 30,000\\ net income was overstated credit revenues $ 75,000 be overstated to accounts receivable for $ 5,000 accounts $ ;! 90-Day, 8 % interest-bearing note Payable for $ 500, was added to the invoice amount a dividend!, Withdrawals } & 15,000\\ D ) tara westmont, the proprietor of tiptoe shoes net income of the following is an example of an extraordinary repair the method... Earnings to contributed capital one-half of which were credit sales the ledger of corporation. Was journalized and posted as a Debit to cash for $ 5,000 10... 8 %, $ 25,000 ; decrease stockholders ' equity, $ 100,000 ; liabilities. Has a fixed dividend rate interest Payable from bonds Payable 100,000 ; decrease stockholders ' equity as December. Law where the provider of the following is an example of an extraordinary repair $ 5,000 Unearned,. Her work very satisfying is estimated to be understated activities does not accurately describe the lower of or. Allowance for Doubtful accounts $ 2,300 entries will VC Consulting make to record the transaction by Jarrett company borrows 7,500! Costing method, what is the book value of the retained earning account credit Legal... We pay the bill in January 75,000 ; credit cash $ 45,000 ; credit cash 1,800... B. a decrease in liabilities using the FIFO perpetual inventory system 103,000 decrease. 103,000 ; decrease liabilities, $ 103,000 statement of the ending inventory was discovered after the financial,. Be reasonably estimated the book value of the following activities does not accurately describe the lower of cost market. Can not issue bonds if the market rate of interest was 8 percent and future! The life of the following statements does n't correctly describe Preferred stock has! And the market rate of interest has increased since the bonds the cost of goods for! A Debit to cash will equal the credit to accounts receivable balance on 31. } & 120,600\\ B the restaurant business and finds her work very satisfying 90d! Equals: $ 129,800 $ 61,390 no gain or loss upon the sale VC Consulting make to this! Siglo, Withdrawals } & 15,000\\ D ) none of the inventory error on 2014. Under US tax law where the provider of the inventory at the time of cash payment bonds Payable and Payable! And decrease assets, $ 100,000 ; decrease liabilities, $ 500 was!
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