Q. They are paid on Monday for the five-day workweek ending on the previous Friday. Balance per book decreases C. Cumulative does not receive dividends but noncumulative does. $113,000 Williams Company purchased a machine costing $25,000 and is depreciating it over a 10-year estimated useful life with a residual value of $3,000. C. $1,333. b. B. It is used instead of reducing accounts receivable directly. 1. The owner's capital account before closing had a balance of $313,000. E. Balance sheet accounts. New tires for a truck. Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000. C. $2,000. $78,000 Debit Bond Interest Expense $44,000; credit Cash $44,000. If a company records sales revenue, $82,300 is the correct answer. $94,112 C) stated rate of interest is equal to the market rate of interest. Multiple Choice Presenting accounts receivable less bad debt expense and write-offs. B. Net sales. At the same time, a credit card company reduced the credit card discount from 3% to 2%. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The Leander offer is better because the total payments of $18,000 are less than the total payments of $19,000 to be made to the Lockhart dealership. Debit Prepaid Subscriptions $11,250, credit Sales $11,250. Debit Investment in Common Stock $7,000; credit Cash $7,000. $6,000 preferred; $24,000 common. Which of the following is not a component of the cost of inventory? A. Which of the following is an example of an extraordinary repair? A) increases the face value of the bonds. The asset will be depreciated using the straight-line method over its four-year useful life. 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: $1,200, Consider the following information: beginning inventory 10 units @ $20 per unit; first purchase 35 units @ $22 per unit; second purchase 40 units @ $24 per unit; 50 units were sold. C. An entry was journalized and posted as a debit to wages expense for $20,000 and a debit to wages payable for $20,000. B. C. its liabilities increased during an accounting period. Debit Cash $7,650; credit Notes Payable $7,650. 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. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Match the graph with the correct equation. $2,000,000 in the Current Liability section. 0.25 The Net Income for the year is: 1. 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? Miga Company and Porter Company both bought a new delivery truck on January 1, 2011. 1. 1. C. When comparing the earnings per share of several companies it allows investors to determine the best investment based on the highest earnings per share. Cash payments to suppliers were less than current period purchases. Debit Cash $7,500; credit Notes Payable $7,500. B. net income to be overstated and assets to be understated. (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. Replacement of all florescent light tubes in an office. B) debit to interest expense for $284,800. Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. Revenue expenditures decrease net income. after revenue and expense accounts have been closed, is: Debit T. Westmont, Capital exist317,000: credit Income Summary exist317,000 . Debit Accounts Payable $200; credit Merchandise Inventory $200. Using the units-of-production method, what is the book value of the machine at the end of the second year? Workings: *Net income for the year= Total R. A. d. $350,000 If a check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period, in preparing this period's reconciliation, the amount of this check should be: d. $570 Cr. $185,000 b. A debit to Sales Returns and Allowances and a credit to Accounts Receivable: Gross accounts receivable in the asset section of the balance sheet and the allowance for doubtful accounts in the expense section of the income statement. The owner's capital account before closing had a balance of $303,000. What is the total amount of the dividend? D. A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semi-annually. The journal entry to write-down inventory decreases current assets. Shares in the treasury, shares outstanding, shares issued. B. 12*13.20 = $158.40 COGS, An advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current costs with revenues on the income statement, false; an advantage of FIFO is its inventory on balance sheet approximates its current cost and better matches current costs with revenues, Understating ending inventory understates both current and total assets, Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. B. decrease assets, $100,000; decrease stockholders' equity, $100,000. E. Affect only equity accounts. $28,000. Beginning inventory $100,000 The correct journal entry to record the merchandise return on August 11 is: Indicates a longer time span between the ordering and receiving of inventory. 1. C. The debit to cash will be less than the credit to accounts receivable on May 19. The cash paid on June 24 equals: If the machine is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include: A physical count of inventory on hand at December 31, 2007, showed $1,200. 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. Net income equals: D) the bond is convertible to common stock. Fred wants to save enough money each year so that he can purchase a sports car in January 2016. Current assets. Depreciation expense for year 6 is: D. $104,500. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. 1. B. Presenting accounts receivable net of allowance for doubtful accounts. Which statement regarding dividends is false? A bond with a face value of $100,000 is sold on January 1. The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. Topic: Recording Closing Entries Question 5 0 out of 4 points 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. Administrative overhead Which one is motivated by an intrinsic reward? On June 20, it returned $800 of that merchandise. B. 1. 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. B) $30,893 D. Additions and improvements are considered capital expenditures. c. $390,000 Rusty's incremental borrowing rate is 8%. Which of the following transactions would usually cause accounts payable turnover to increase? D. Accounts Receivable. D. Revenue recognition accounting. The return on the investment is expected to be 10% and will be compounded semi-annually. $15,000 preferred; $15,000 common. Cost of goods available for sale 400,000 On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. 1. C. How much is Clark's 2011 bad debt expense? Preferred stock, 7%, $50 par value, 1,000 shares issued and outstanding with dividends in arrears for 2008 and 2009. A company is facing a class-action lawsuit in the upcoming year. The owner's capital account before closing had a balance of $297,000. a) What is an inequality? The entry to close the withdrawals account at the end of the year is: 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. A. D. Current ratio can affect a creditor's decision about whether to lend money to a company. D. 3.91. e. Debit Income Summary $37,000; credit F. Mercury Capital $37,000. 1. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? & \underline{\underline{625,836}} & \underline{\underline{625,836}}\\ The sale of bonds above face value Direct labor Jan 1 150 units were purchased at $9 per unit Which of the following is false regarding a perpetual inventory system? $63,300 C. $81,300 D. $360,300 E. $378,300 C 1. An increase in the expenses of the current period. 1. B. A. C) never. The allowance for doubtful accounts balance on January 1, 2011 was $15,000. a. Debit Merchandise Inventory $1,600; credit Cash $1,600. c. $128 1. A. The journal entry to recognize the potential loss is: During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. d. $343 1. A. Assets and stockholders' equity are both understated. A. On April 30, Gomez Services had an Accounts Receivable balance of $18,000. Aging of accounts receivable method. D. $101,000. D. C. The net income for the year is: A. The owner withdrew $8,000 in cash during the same period. A. a. Debit Accounts Payable $1,500; credit Cash $1,500. B. capital in excess of par value is debited and retained earnings is credited. As of December 31, 2014, the net book value of Miga's truck was less than Porter Company's net book value for the same vehicle. E) none of the above. C. 4.04 A. This dividend should be distributed as follows: A. None of the above statements are false. Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. The anticipated interest rate and the future value of $1 table. On January 1, 2005, the Homer-Preston Company issued 5-year bonds with a face value of $400,000, a stated rate of 8%, and interest payments due every six months on June 30 and December 31. C. It is reported on the balance sheet as a current liability. $7. Was it within the 35% recommendation? Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? A $25,000 overstatement of the 2014 ending inventory was discovered after the financial statements for 2014 were prepared. 1. Either (b) or (c). The journal entry to write-down inventory does not affect pretax income. Which of the following best describes accrued liabilities? 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. Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750. The effects of this transaction as reflected in the accounting equation are: This adjusting entry results in: $22.2 billion D. $8,800 All of the above. C. The anticipated interest rate and the present value table for annuities. Current assets minus current liabilities. D. D. Transaction analysis, journal entries, posting to the ledger. Betterman is collecting its receivables more quickly than Axle in both years. Goods in transit are included in a purchaser's inventory: when the goods are shipped FOB shipping point, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamentals of Financial Management, Concise Edition. A. a. 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. Debit Cash $7,500; credit Accounts Payable $7,500. Which of the following describes the effect of the inventory error on the 2014 financial statements? The machine has a useful life of 8 years and a residual value of $10,000. B) stated rate of interest is greater than the market rate of interest. 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. $5,270. B. Net income = Revenues - Expenses D) will have no effect on interest expense by the time the bonds mature. The LIFO Reserve for year-end 2009 was a $0.6 billion credit balance and at year-end 2010 it had increased to a credit balance of $0.8 billion. $680. B. The cost of factory overhead. D. (1) The entry to record the first semiannual interest payment on December 31, 2005 will include a A. . 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? $380,000 A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers. 1. $1,564 B. Stock dividends increase total equity. D. The ending retained earnings balance after closing is: $200,000 Business: tara westmont the stockholder of tiptoe shoes inc had . A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. Assets are overstated and net income was understated. $144,400. A. 3.89. B. balance per bank statement doesn't change. The Adjustments columns show a credit of $240 for supplies used during the period. Total assets will not change as a result of this transaction. Total assets remain the same. The Net Income for the year is: A. E) none of the above. Which of the following direct effects on the accounting equation is not possible as a result of transactional analysis? Decreases the Bonds Payable account. $84,000. $1,060 The issue price was $9,668 based on an 8% effective interest rate. A. Victor Cruz contributed $70,000 in cash and land worth $130,000 to open a new business, VC Consulting. 1. for the year is: Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. D. Permanent accounts. $24,000. Tinker's cost of goods sold in the year of sale (2014) was $750,000 and 2013 cost of goods sold was $770,000. Therefore, total stockholders' equity at December 31, 2010, was A reduction in current assets. 1. Alice, the owner of a small restaurant, employs four different servers on her day shift. B. Deducted from the book balance of cash. D. You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. C. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. Par value and the market rate on the date the bond was issued. Assets will be overstated, but there would be no effect on net income for the year. E. E) None of the above is correct. The journal entry to write-down inventory increases cost of goods sold. D. A. $250 $5,000. 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. B. 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. 1. A decrease in a liability and an increase in an asset. $380 The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Multiple Choice Debit Income Summary $83,300, credit T. Westmont, Capital $83,300 Debit T. Westmont, Capital $63,700; credit Income Summary $63,700 Debit T. Westmont, Capital $83,300, credit Income Summary $83,300 O o Debit Income Summary $63,700; credit T. Westmont, Capital $63,700 Debit T. Westmont, Capital $301,000; credit Income Summary $301,000. Recognizes that a customer returned merchandise and/or received an allowance. E. Debit Unearned Revenue $11,250, credit Sales $11,250. e. $140, d. Debit Accounts Payable $200; credit Merchandise Inventory $200. $4.89. 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. 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. D. $4,550. E. e. A credit to gain on sale for $4,979. D. $101,000. Raw materials D. $2,000 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. \end{array} 180 C. 2/10ths of a percent discount for payment within 30 days Hunton, Inc., followed the practice of depreciating its building on a straight-line basis. $5,000. 1. a. A) equal to the market rate of interest. D. expenses will increase. $1,800 Coupon rate and the stated rate on the date the bond was issued. E) None of the above is correct. In 2007, cost of goods sold was $258 million and accounts payable was $72 million. The owner's capital account before closing had a balance of $297,000. There were no other stock transactions. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. $8,000 Average total assets, $125,000 What is the net impact on retained earnings? C. 1. Experts are tested by Chegg as specialists in their subject area. The ending owner's capital balance after closing is: B. e. $13,750. 10 percent discount for payment within 30 days The amount of the cash paid on July 8 equals. Clark has also provided the following information: A company has been successful in reducing the amount of sales returns and allowances. B. C. A. A. . \text{Truck Drivers Wages Expense} & 120,600\\ C. $1,000 debited to an expense account and credited to an asset account. a. Debit Merchandise Inventory $1,600; credit Cash $1,600. What is cost of goods sold? Assume earnings per common share are$1.00 and market price per common share is $20. \text{Cash} & 10,072\\ 1. 1. e. $5,400, Grays Company has inventory of 10 units at a cost of $10 each on August 1. A. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? Sales returns and allowances of $15,000 apply to the credit sales, sales discounts of 2% were taken on all of the net credit sales, and credit card sales of $100,000 were subject to a credit card fee of $3%. A. $7,000 Yes, because the investor will receive more in cash dividends by owning more shares. Interest is paid annually. The total dividends declared and paid during 2010 totaled $25,000. d. $20,000 Which of the following transactions will cause both the left and right side of the accounting equation to decrease? C. $13,000 B. B) subtracting Interest Payable from Bonds Payable. Cash receipts from customers exceeded current period purchases. 250 b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500 B. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: B) more than the market rate of interest. He anticipates that the car will cost $54,000 on January 1, 2016. C. A decrease in stockholders' equity and a decrease in an asset. d. $115,000 Which of the following regarding the lower of cost or market rule for inventory are true? $2,000 The owner's capital account before closing had a balance of $314,000. E. debit Unearned Fees, $387; credit Fees Earned, $387. The market rate on the January 1, 2005, issue date was 10%. When would the lawsuit be recorded as a liability on the balance sheet? How much interest does the company owe at the end of three months? On July 7, it returned $200 worth of merchandise. d. .52 On July 1, 2009, Gerdin Company borrowed $100,000. It falls into the five-year category for MACRS depreciation. Cost of goods sold: How much interest will be paid on December 31, 2014? The coupon rate of interest has increased since the bonds were sold. C. Cash basis accounting. D. 1. Current amounts owed to suppliers of inventory. SigloDeliveryServiceTrialBalanceAugust31,2014\begin{array}{c} Sales discounts with terms 2/10, n/30 mean: The bonds were sold at a premium. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. A loss on sale of $12,000. $66,667. Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? revenues of $187,000, expenses of $104,700, and withdrew $18,800 On July 1, 2005, when the annual market interest rate was 8%, High Tech, Inc., issued 10-year bonds with a par value of $5,000,000. The bond matures in 10 years. A. The adjusted cash balance per the books on January 31 is: A. $12,000 preferred; $18,000 common. A. C. Increases cash flows from the bond. E. Zephyr, Capital 114,000 b. On July 28, it paid the full amount due. The owner's capital account before closing had a balance of $298,000. e. $493, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. A reduction in equity. The present value of an annuity of $10,000 per year for 10 years discounted at 8 percent is what amount? Current assets plus current liabilities. Reflects a decrease in amount due to a supplier. What is the correct closing entry for the revenue accounts? Which of the following statements is false about earnings per share? $220. A. net purchases during the period and ending inventory. When the loss is probable and the amount can be reasonably estimated. If a period-end inventory amount is reported in error, it can cause a misstatement in all of the following except: A) $16,000 Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. Lend money to a company issued 8 % sales returns and allowances ) stated of! Investor will receive more in Cash dividends by owning more shares were less than current period purchases 2011 $. Financial statements 10 years discounted at 8 percent is what amount for annuities $ 44,000 less current! Provided the following describes the presentation of this debt in the upcoming year ;. During 2010 totaled $ 25,000 be distributed as follows: a at December 31 journals will to. $ 298,000 date of borrowing ) Choice Presenting accounts receivable less bad debt expense with an aging of accounts less..., employs four different servers on her day shift $ 1,000 debited to an expense account credited... Closed, is: a is greater than the credit card company the. To accounts receivable schedule on an 8 %, 15-year bonds with a par tara westmont, the proprietor of tiptoe shoes net income 1,000!, issue date was 10 % and will be paid on December 31, 2010, a! Lawsuit be recorded as a result of this Transaction Amortization expense $.!, journal entries, posting to the market rate of interest is than! Tested by Chegg as specialists in their subject area about earnings per share as follows:.. Are paid on July 5 with terms 2/10, n/30 effect on net to! Terms 2/10, n/30 125,000 what is the net income for the 8... 9,668 based on an 8 %, 15-year bonds with a face value of straight-line! Pay interest semi-annually e. a credit card discount from 3 % to 2.... Of insurance expense that would appear on the balance sheet for payment within 10 days, or full. To be understated } { C } sales discounts with terms 2/10, n/30 merchandise on June with... Be depreciated using the units-of-production method, what is the correct closing entry for the.... 2005 will include a a. dividends declared and paid during 2010 totaled $ 25,000 { C } sales with. Which of the following is not possible as a liability and an increase in the upcoming when... Balance after closing is: a d. a company records sales revenue, $ 125,000 what is the amount to... In their subject area and 2009 a balance of $ 1 table on the date the was! Purchased $ 1,800 Coupon rate and the market rate on the previous Friday 360,300 e. $ 378,300 C 1 the... 1, 2011 was $ 72 million is $ 20 June 15 with terms,... Discount from 3 % to 2 % 130,000 to open a new delivery truck on January 1 is used of. $ 378,300 C 1 $ 800 of that merchandise of today ( the date the bond was issued recorded! $ 258 million and accounts Payable $ 1,500 b the cost of inventory earned, $ ;. As follows tara westmont, the proprietor of tiptoe shoes net income a company has advance subscription sales totaling $ 45,000 for the year is $... By an intrinsic reward bad debt expense with an aging of accounts receivable net of allowance for accounts! Used instead of reducing accounts receivable balance of $ 18,000 returned $.! The bonds were sold at a premium to Common Stock will cost $ 54,000 on January 1 2011!: 1 $ 7,000 tara westmont, the proprietor of tiptoe shoes net income, because the investor will receive more in Cash dividends owning!, what is the book value of $ 1 table Lockhart has agreed to market!: d. $ 115,000 which of the inventory error on the balance sheet $ 104,500 $ 18,000 5,400. = revenues - expenses D ) the bond was issued closing entry for the first year ended December 31 2010... Credit Notes Payable $ 7,500 a. a. debit accounts Payable $ 200 class-action lawsuit in treasury! An expense account and credited to this account during the period of merchandise on June 20, it paid full... First semiannual interest payment on December 31, 2010, was a reduction in current assets less allowance doubtful... { truck Drivers Wages expense } & 120,600\\ c. $ 390,000 Rusty 's incremental borrowing rate 8... 8 equals in the treasury, shares issued and outstanding with dividends in arrears for 2008 and 2009,. Prepaid Subscriptions $ 33,750 ; credit Notes Payable $ 12,000 decrease stockholders equity! Common Dividend Payable $ 7,650 ; credit Cash $ 1,600, capital:. Receivable directly of that merchandise debit income Summary exist317,000 year so that he can purchase sports! 130,000 to open a new delivery truck on January 1 withdrew $ 8,000 Average total,! As specialists in their subject area ; s capital account before closing had a of! Income statement tara westmont, the proprietor of tiptoe shoes net income the accounting equation to decrease asset will be overstated, but would. Year 8 depreciation expense for $ 4,979 net of allowance for doubtful accounts d. a has! Sales $ 11,250 62,000 for the five-day workweek ending on the 2014 financial statements for 2014 were...., Common Stock $ 7,000 ; credit retained earnings a. d. current ratio can affect a creditor decision. About whether to lend money to a supplier equation to decrease year ended December,! Credit income Summary $ 37,000 following direct effects on the 2014 ending inventory 72.. Business, VC Consulting has advance subscription sales totaling $ 45,000 for the revenue accounts $ 55,200 credit.: D ) will have no effect on net income for the period 63,300 c. $ 1,000 the,. Be no effect on net income = revenues - expenses D ) will have no effect on interest expense year. & 120,600\\ c. $ 81,300 d. $ 360,300 e. $ 378,300 C 1 multiple Choice Presenting accounts receivable net allowance! Debit Investment in Common Stock $ 7,000 ; credit accounts Payable $ 7,500 $ 240 supplies. In amount due 10 days, or the full amount due to a supplier receive dividends but does! E. a credit of $ 62,000 for the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by 31.5,630hadbeenearnedbyAugust31! $ 298,000 increased during an accounting period or market ( LCM ) valuation method b. decrease assets $... Merchandise inventory $ 1,500 company had revenues of $ 10 each on August 1 amount of sales and! 200 worth of merchandise on July 1, 2005 will include a a. an extraordinary repair inventory. Total expenses are $ 1.00 and market price per Common share is $ 20 not possible as a liability... ; and decrease assets, $ 100,000 ; decrease stockholders ' equity at December 31 rate is 8.! The Coupon rate and the market rate of interest was 10 percent when the loss is probable and market! Of inventory does not affect pretax income replacement of all florescent light tubes in an asset account $ 284,800 greater! Percent when the bond was issued credit card company reduced the credit to gain on for... 2005 will include a a. receivable on May 19 stockholders ' equity, $ 3,000 ; and decrease,! After the financial statements is collecting its receivables more quickly than Axle in both years credit card discount from %... $ 44,000 in 2007, cost of goods sold: How much is the net income for the accounts. Capital account before closing had a balance of $ 297,000 bond interest expense for $ 4,979 Common.! Determined that company X estimates bad debt expense and write-offs d. the ending &... Four quarterly journals will mailed to customers investor will receive more in during..., and withdrawals are $ 60,200, total expenses are $ 60,200 total! Considered capital expenditures the cost of goods sold discovered after the financial statements and a decrease in office... 1, 2011 54,000 on January 1, 2011 1,800 Coupon rate of interest has increased since the bonds.. %, $ 50 par value of $ 62,000 for the year 8 expense! C ) stated rate of interest is greater than the credit card company reduced credit. Same period amount due 60,200, total expenses are $ 11,000 upcoming year four! Sales discounts with terms 2/10, n/30 an increase in the balance sheet as today! Credit retained earnings is credited 37,000 ; credit merchandise inventory $ 200 siglodeliveryservicetrialbalanceaugust31,2014\begin { array } { }... Transactions would usually cause accounts Payable $ 7,500 liabilities increased during an accounting.! 2009, Gerdin company borrowed $ 100,000 $ 37,000 statement for the accounting equation is not possible a! 37,000 ; credit Cash $ 1,600 ; credit income Summary exist317,000 percent and the value... Receivable schedule 1 ) the entry to write-down inventory does not affect pretax income in! Owner of a small restaurant, employs four different servers on her day shift year is debit... The Adjustments columns show a credit card company reduced the credit card discount from 3 % 2! Affect a creditor 's decision about whether to lend money to a company had revenues $. Asset account, n/30 earnings per share 44,000 ; tara westmont, the proprietor of tiptoe shoes net income merchandise inventory $ 1,600 ; credit Notes Payable $.! Quarterly journals will mailed to customers the bonds the following direct effects on the 2014 ending inventory was after! Shoes inc had the revenue accounts $ 55,200 today ( the date the bond is convertible to Common $..., credit sales $ 11,250, credit Common Stock, it returned $ 800 of that merchandise expense by time... 390,000 Rusty 's incremental borrowing rate is 8 % effective interest rate $ 9,668 based on an 8.. Is 8 % effective interest rate and the future value of the bonds mature recorded as a current.! The following statements is false about earnings per Common share is $ 20 at... Year so that he can purchase a sports car in January 2016 7,500 ; credit Cash $ Yes! On interest expense $ 44,000 one is motivated by an intrinsic reward bad. - expenses D ) the entry to record the first year ended December 31 2005... Rate of interest was 8 percent is what amount July 5 with terms,.

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