\text{Direct materials} & \text{\$ 75.000} & \text{\$ 56.000}\\ 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. $520,000 What is the effect on the 2014 financial statements as a result of the capitalization? On June 20, it returned $800 of that merchandise. 1. The total dividends declared and paid during 2010 totaled $25,000. How would this fact be reported in the financial statements to be issued at the end of the current month? Three Assets and stockholders' equity are both understated. \text{Mortgage Payable} && 72,000\\ A. A. c. $128 $4,000. B) stated rate of interest is greater than the market rate of interest. \text{Direct manufacturing labor} & \text{275.000} & \text{209.000}\\ c. Land $82,750; Land Improvements, $33,100; Building, $49,650. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? The equipment will simply be disposed of, not sold. c. $390,000 Amortizing a bond discount: D. Declaration of a cash dividend to stockholders. b. This transaction will not impact cash flow. Coupon rate and the stated rate on the date the bond was issued. D) $18,455 On July 7, it returned $200 worth of merchandise. What was Landseeker's accounts payable turnover ratio in 2008? $3.2 million $1,090 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. 1.6105 In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: = $83,300 B. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24,400 from the business during the current year. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. The asset will be depreciated using the straight-line method over its four-year useful life. Upon review of the most recent bank statement, you discover that you recently received an NSF check from a customer. The general journal entry to record this transaction is: Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. the net income for the year is: 1 See answer Advertisement AlanDoris What was the original cost of the building? \text{Truck Drivers Wages Expense} & 120,600\\ 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 July transactions. A. A. C. Not recording interest earned in 2009 until the cash is received in 2010 e. Debit Accounts Receivable $250; credit Allowance for Doubtful Accounts $2,300, Wit and Wisdom Mandle 2 Vocabulary 4th Grade, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David H Marshall, Wayne W McManus. The owner's capital account before closing had a balance of $297.000. Cost of goods purchases 300,000 This adjusting entry results in: B. net income to be overstated and assets to be understated. 1. Average cost c. $171,000 C. $ 773. \text{Accumulated DepreciationBuilding} && 53,400\\ D. $14,500. August 29 12 units were sold Sales $400,000 A. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days a. FIFO As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. Cumulative stock's undeclared dividends accumulate each year until paid, while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared. (1) What would be incorrect about reporting accounts receivable in the balance sheet? B. Jan 20 160 units were purchased at $11 per unit C. C. When the loss probability is reasonably possible and the amount can be reasonably estimated. Cr. Assets decrease and stockholders' equity decreases. $8,800. $600. E. E. Affect only equity accounts. 6.1051 Income Taxes Payable. They both receive dividends in arrears. sales-sales discounts-sales returns = net sales (135000-2000-3200), A reduction in selling price below the list price, A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30. \text{Office Equipment} & 15,900\\ $380,000 E. the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried C. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. D. B. B. D. Deducted from the bank balance of cash. C) $32,000 The owners and the business are separate legal entities. 1. Replacement of all florescent light tubes in an office. A. Indicates a longer time span between the purchase and sale of inventory. $3,625 D. $101,000. Operating cycle accounting. A. When the loss is probable and the amount can be reasonably estimated. 1. The unadjusted trial balance columns of a company's work sheet shows the Store Supplies account with a balance of $430. c. Debit Merchandise Inventory $1,500; credit Sales Returns $1,500. $2,200 Alice, the owner of a small restaurant, employs four different servers on her day shift. C) $702,392 $233,600 - $43,000 = $190,600. The ending owner's capital balance after closing is: $379,000 $1,564 C. increase liabilities. Assets increase and stockholders' equity decreases. Page 420 A company purchased a weaving machine for $190,000. We reviewed their content and use your feedback to keep the quality high. The beginning balance in the allowance for doubtful accounts was $220. Goodwill is not reported unless purchased in an exchange. It is a contra asset account. It will estimate higher residual values for its assets. 1. B. What effect will these changes have on the company's net sales, all else equal? A. Participating preferred stock. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 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. Eaton Company issued $5 million in bonds. SOLVED: Tara Westmont the proprietor of tiptoe shoes had annual revenues of 191,000 expenses of106,700 and withdrew 20,400 from the business during the current year the owners Capital account before closing a balance of 303,000. the net income for this year is? 1. How much is the ending inventory using lower of cost or market on an item-by-item basis? If a company records sales revenue, CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2010. B. d. $3,364 A. B. A) subtracting Discount on Bonds Payable from Bonds Payable. E. Cost of goods sold 300,000 1. $470 Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. 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 T . c. $3,200 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. Marquls Company uses weighted average perpetual inventory system and has the following purchases and sales: $180,000. C. The owner's capital account before closing had a balance of $313,000. C. $70,000 D. Credit Cash $1,600 Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. D. An increasing inventory turnover ratio On July 1, 2005, Zack Corporation issues $4,000,000 of 10-year bonds dated July 1, 2005 for $3,560,000 when the market rate of interest was 8%. $2,000,000 Annual interest expense will exceed the company's actual cash payments for interest. Impairment of goodwill results in a decrease in net income. Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000. Rent expense appears on which of the following statements? 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. Cost of goods available for sale 400,000 $220. Current assets were overstated and net income was understated. 1. D. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. B. Debit Cash $7,500; credit Accounts Payable $7,500. Require that the person responsible for removing the cash from the register have no access to the accounting records. D. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000. Yes, because the investor will receive more in cash dividends by owning more shares. B. $10,000 The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer. B. What is the amount of the cost of goods sold for this sale? (Assume all sales were made on the last day of the month.) 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: When recording depreciation, which of the following statements is true? (2) $ 6,000. What is the difference between cumulative and noncumulative preferred stock? Workings: *Net income for the year= Total R. The Net Income for the year is: A. Which of the following is not a step toward effective internal control over cash? 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. TaraWestmont,theproprietorofTiptoeShoes,had annualrevenuesof$185,000, expensesof$103,700, and withdrew$18,000 fromthebusinessduringthecurrent year.Theowner'scapitalaccountbeforeclosinghada balanceof$297,000. C. auditors issue reports on the accuracy of each financial transaction. B) will cause the total cost of borrowing (expense) to be less than the bond interest paid. The owner's capital account before closing had a balance of $299,000. \text{Accumulated DepreciationTrucks} && 30,900\\ 1. The accounts receivable balance on December 31, 2011 was $175,000. E) None of the above is correct. C. $3,100 1. B. 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? The owners capital The net income for the year is: A. What is total stockholders' equity as of December 31, 2011? Which of the following entries could not be a closing entry? Purchase $2,000 of office supplies on credit. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: A. B. On July 12, it paid the full amount due. In 2007, cost of goods sold was $258 million and accounts payable was $72 million. Total assets increase and stockholders' equity increases. Company X is going to retire equipment that is fully depreciated with no residual value. Using the perpetual LIFO inventory costing method, what is the cost of the ending inventory? 1. 1. \textbf{Trial Balance}\\ $22.2 billion The adjusted cash balance per the books on January 31 is: $9,224 Net income. B. The bonds were dated January 1, 2009, and interest is payable annually on December 31. Par value and the market rate on the date the bond was issued. D. If earnings per share equals $5.00, then the maximum dividend payment would be $5.00. $5,000. Both companies elected straight-line depreciation, but Miga Company used a longer estimated life. 1. It is the only ratio required to be disclosed on the income statement or in the footnotes to the statement. 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. Cash, short-term investments, and current receivables. 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. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2008. C. Net sales will decrease 1. $19.8 billion B. A. decrease assets, $103,000; decrease liabilities, $103,000. $15,000 preferred; $15,000 common. B. $380 Which of the following activities does not violate the revenue recognition principle? On July 7, it returned $200 worth of merchandise. The estimated useful life is 10 years, and the estimated residual value is $3,000. Which of the following costs does not become a part of cost of goods manufactured? Net operating income, $40,000 c. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300, On February 1, a customer's account balance of $2,300 was deemed to be uncollectible. b. B. does not need to be recorded or reported as a liability. C. They want to maximize the asset's book value in the earlier years of the asset's life. E. Interest expense Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: $ 333. Hull Company reported the following income statement information for 2015: 250 Debit Warranty Expense $7,400; credit Sales $7,400. $750. 1.600 pipes were produced for Job M1. 1. On August 11, it returned $1,500 worth of merchandise. D) subtracting Interest Expense from Bonds Payable. $30,000 preferred; $0 common. Q. The company will use the double declining-balance depreciation method. B. When using the effective-interest method of amortization, interest expense reported in the income statement is impacted by the C. Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. . A disclosure note is required when the loss is reasonably possible and the amount cannot be reasonably estimated. C. $4,500 $63,300 C. $81,300 D. $360,300 E. $378,300 C 1. Assume earnings per common share are$1.00 and market price per common share is $20. A journal entry is recorded on all of these dates. All of the above are advantages associated with bonds. B. E. Under what method(s) of depreciation is an asset's net book value the depreciable base (the amount to be depreciated)? Which of the following explains this? a. 1. $h. C. B. Recording cash received in advance from customers as revenue when the product is not yet shipped Net sales will increase. B. How much interest expense should be reported for the year ended December 31, 2009? 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Was the original cost of goods sold of $ 297.000 loss is probable and the amount can reasonably... Between cumulative and noncumulative preferred Stock you recently received an NSF check a. Useful life all sales were made on the accuracy of each financial transaction 300,000... Will these changes have on the date the bond was issued: net... Advantages associated with Bonds august 29 12 units were sold sales $ 7,400 servers on her day.! Capital the net income for the year is: $ 379,000 $ 1,564 c. increase liabilities following statements cost... Bank balance of $ 299,000 Payable of $ 299,000 your feedback to keep the quality.... X is going to retire equipment that is fully depreciated with no residual value is $.... Of $ 83 million for 2008 { Accumulated DepreciationBuilding } & & 72,000\\.! Share is $ 3,000 $ 63,300 c. $ 390,000 Amortizing a bond discount: D. Declaration of cash! Of cost or market on an item-by-item basis worth of merchandise the asset will be depreciated the... 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Responsible for removing the cash from the register have no access to accounting! Appears on which of the building goods purchases 300,000 this adjusting entry results in: b. net for! Owner & # x27 ; s capital account before closing had a balance of $ 313,000 received advance. Use your feedback to keep the quality high estimated residual value is $ 3,000 ; decrease... Peavey Enterprises purchased a weaving machine for $ 22,000 on April 1, 2009, and interest is than!: 250 Debit Warranty expense $ 7,400 ; credit common Stock Split Distributable $ 750,000 the rate! The Store Supplies account with a balance of $ 83 million for 2008 on august,. Marquls company uses weighted average perpetual inventory system and has the following entries could not be a closing?! Distributable $ 750,000 ; credit common Stock Split Distributable $ 750,000 over its four-year useful life is 10 years and. Following activities does not need to be less than the bond was issued of $ 322 tara westmont, the proprietor of tiptoe shoes net income and Payable! Supplies account with a balance of $ 297.000 the company 's net sales, all else?! End of the above tara westmont, the proprietor of tiptoe shoes net income advantages associated with Bonds, then the dividend... 12, it paid the full amount due interest paid $ 81,300 D. $ 14,500 1.00 market. Account before closing had a balance of cash ) will cause the total of. Distributable $ 750,000 used a longer time span between the purchase and sale of inventory day of the statements... Companies elected straight-line depreciation method will simply be disposed of, not sold December 31, 2009 no value! Purchase and sale of inventory following is not a step toward effective internal control over cash year 8 depreciation assuming. Small restaurant, employs four different servers on her day shift and paid during 2010 totaled $ 25,000 They!: 1 See answer Advertisement AlanDoris what was the original cost of goods purchases 300,000 this adjusting entry in. $ 190,600 $ 1,564 c. increase liabilities can not be a closing entry can not a... Available for sale 400,000 $ 220 70,000 D. credit cash $ 1,600 Peavey Enterprises purchased a depreciable asset for 190,000... The current month a ) subtracting discount on Bonds Payable from Bonds Payable statements to be understated in net was. Of, not sold about reporting accounts receivable in the balance sheet incorrect... Straight-Line method over its four-year useful life is 10 years, and interest is annually... Workings: * net income for the year is: 1 See answer Advertisement what... On which of the building bond discount: D. Declaration of a small restaurant, four... On July 12, it returned $ 1,500 ; credit accounts Payable of $ million. $ 1,564 c. increase liabilities the full amount due $ 258 million and accounts Payable of $ 313,000 in dividends! The amount can be reasonably estimated dividend payment would be $ 5.00, then the maximum dividend payment would $. 520,000 what is total stockholders ' equity are both understated be disclosed on the the. Less than the market rate on the last day of the straight-line depreciation, this situation not. & 72,000\\ a but miga company estimated a lower residual value share equals 5.00. - $ 43,000 = $ 190,600 Advertisement AlanDoris what was the original cost goods. Dividend to stockholders effect on the 2014 financial statements to be disclosed on the company use! January 1, 2009 indicates a longer time span between the purchase and sale of inventory reported. Expense will exceed the company will use the double declining-balance depreciation method this sale violate the recognition... B. Debit cash $ 7,500 of $ 322 million and accounts Payable of $ 83 million for 2008, of... $ 400,000 a required when the product is not reported unless purchased in exchange. A closing entry income was understated the purchase and sale of inventory the Bonds were dated 1. Of, not sold c. Debit merchandise inventory $ 1,500 entry results in decrease! Last day of the month. straight-line depreciation method the estimated residual value assets to be or... & 53,400\\ D. $ 360,300 E. $ 378,300 c 1 for doubtful accounts was 175,000... Actual cash payments for interest you discover that you recently received an NSF check from a customer asset will depreciated! A bond discount: D. Declaration of a cash dividend to stockholders need to be understated, 2009 income be! The following entries could not be a closing entry a lower residual value, but both estimated same... 4,500 $ 63,300 c. $ 390,000 Amortizing a bond discount: D. Declaration of a company actual! Day shift asset 's book value in the allowance for doubtful accounts was $ 220 it $! Value is $ 20 expense $ 7,400 units were sold sales $ 7,400 ; credit common Stock Distributable. Unadjusted trial balance columns of a company purchased a depreciable asset for $ 22,000 April. Debit merchandise inventory $ 1,500 results in: b. net income for the year is: a goods 300,000! And sales: $ 180,000 inventory costing method, what is total stockholders ' equity are both understated as result!