What is the difference between cumulative and noncumulative preferred stock? C. $109,000. Gain of $1,500 It was forced to file for bankruptcy and was liquidated in 2008. Market value of the stock was$12. Total revenues for the period are $69,200, total expenses are $46,800, and withdrawals are $14,600. Which of the following describes the correct action to be taken when preparing your bank reconciliation? 10 percent discount for payment within 30 days. 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. On December 31, 2009, Goode paid $103,000 to settle the debt in full. The correct journal entry to record the merchandise return on August 11 is: August 2 10 units were purchased at $12 per unit Require signatures from a manager and one financial officer on all checks. C. A. A. D. A partnership is not considered to be a separate accounting entity. Accrued but unpaid truck drivers wages at the end of the year, $1,920. $84,000. Written, recorded, sent to payees, and received and paid by the bank. When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. 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. C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable. The financial statements are not affected. 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 discount of 3%. 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? 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. Assets will be overstated, but there would be no effect on net income for the year. Income Taxes Payable. It is a contra-asset account. B. E) None of the above. 1. On July 1, Plum should record: d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. The anticipated interest rate and the future value of $1 table. The 2007 income statement should report supplies expense amounting to Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called: Inventory of unused delivery supplies,$1,430, \quad\quad c. Inventory of unused office supplies, 186186186$d. The Leander offer is better because the cash down payment is less. e. $200,000, Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Callable preferred stock. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. Recording cash received in advance from customers as revenue when the product is not yet shipped On March 2, it purchased 10 units at $22 each. The journal entry made by Fragmental Co. at year-end on December 31 would be: 1. Held as blank checks. Which statement regarding dividends is false? A. \text{R. Siglo, Withdrawals} & 30,000\\ C) debit to premium on bonds payable for $160,000. Which of the following describes the effect of the inventory error on the 2014 financial statements? 1. Download the file 'breeds.py'; it contains a list of lists named 'breeds'. merchandise inventory refers to products that a company owns and plans to sell to customers, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. $250 A company is facing a class-action lawsuit in the upcoming year. C. $21,500 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. How much is the ending inventory using lower of cost or market on an item-by-item basis? The cash paid on June 24 equals: A. 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. C. Raw materials A. A. B. The cost of shipping for the merchandise is $7 per unit. 4. \text{Trucks} & 103,800\\ What is the effect on the 2014 financial statements as a result of the capitalization? The owner's capital account before closing had a balance of $312,000. This transaction will not impact cash flow. The current market rate is 8%. 1. \text{Office Supplies} & 2,460\\ Depreciation expense for year 6 is: 1. 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. Cannot be determined from the information given. $4,500, What is the present value factor for an annuity of five periods and an interest rate of 10 percent? Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. Its supplier's catalog indicates a list price of $500 per unit on merchandise Jasper intends to purchase, and offers a 30% trade discount for large quantity purchases. Which of the following best describes the objective of depreciation? The correct journal entry to record the merchandise return on July 7 is: Iris Company has provided the following information regarding two of its items of inventory at year-end: Gross accounts receivable less the allowance for doubtful accounts in the asset section of the balance sheet. Goodwill must be reviewed annually for possible impairment. 1. B. \text{Building} & 196,000\\ 1. Total assets decrease and stockholders' equity decreases. Increase of $150,000 Debit Merchandise Inventory $200; credit Sales Returns $200. 2. c. $1,568 Interest expense reduces taxable income. 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. The ending owner's capital balance after closing is: __ $186,000 __ $63,400 __ $81,800 __ $361,400 __ $379,800 Dr. insurance expense 2,000 $1,180 D. an expense. D. Franchises, 1. C. the number of shares outstanding increases while the par value of each share decreases. Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. Roberts Company should report the book value, or carrying value, for the bonds on the December 31, 2009, balance sheet as A company would report a net loss when e. $493, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. What is the journal entry required to close the Income Summary account at. A. 1. 1. C. i and ii The vehicle has an estimated 6-year life and a $4,000 residual value. Marquls Company uses weighted average perpetual inventory system and has the following purchases and sales: The owner withdrew $37,800 during the year. They have high technology, robotic equipment in their plant that becomes obsolete quickly and declines in utility to the company more rapidly in the early years of the assets' lives. D. i, ii, and iii. 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. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. 1. It will select the lowest residual values for its assets. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. 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. Zephyr, Withdrawals 43,000, Net Income $119,600+ $7,000 1. B. 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. Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed. C. Ordinary repairs and maintenance are considered revenue expenditures. B. When the bond is issued, the market rate of interest is 10 percent. SigloDeliveryServiceTrialBalanceAugust31,2014, Cash10,072AccountsReceivable29,314PrepaidInsurance5,340DeliverySupplies14,700OfficeSupplies2,460Land15,000Building196,000AccumulatedDepreciationBuilding53,400Trucks103,800AccumulatedDepreciationTrucks30,900OfficeEquipment15,900AccumulatedDepreciationOfficeEquipment10,800AccountsPayable9,396UnearnedLockboxFees8,340MortgagePayable72,000R. No effect on the expenses of the current period. Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. Therefore, total stockholders' equity at December 31, 2010, was Which of the following costs does not become a part of cost of goods manufactured? B. 1. Increases the market value of the Bonds Payable. C. Debit Cash $7,000; credit Common Stock $7,000. 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. 1. B. $22.2 billion In its last financial statement prior to bankruptcy, Bombay reported current assets of $161,604,000 and current liabilities of$113,909,000. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. The owner's capital account before closing had a balance of $312,000. Assets are overstated and net income was understated. 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. C. The debit to cash will be less than the credit to accounts receivable on May 19. When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced. E) None of the above. Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. Show transcribed image text Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of exist205,000, expenses of exist113, 700, and withdrew exist26,000 from the business during the current year. 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. $1,200 debit. Cash payments to suppliers exceeded current period purchases. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2008. 1. $5,855 To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. $h. The entry to close the withdrawals account at the end of the year is: If a company has current assets of $14,400 and current liabilities of $9,600, its current ratio is 1.5. All of the following regarding the current ratio are true except: A. 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. D. $1,000 debited to a liability account and credited to an asset account. Zack Corporation uses the effective-interest method of amortization. $4.89. 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: Debit Warranty Expense $7,400; credit Sales $7,400. The issue price was $9,668 based on an 8% effective interest rate. $0.34. B. D. 10 percent discount for payment within 30 days Unearned Revenue. 1. C) $82,300 Specific identification. c. $357 Current assets were understated and net income was overstated. $180 Assuming no accruals for interest have been made during the year, transaction analysis of the $103,000 cash payment on December 31, 2009, should reflect the following: Workings: *Net income for the year= Total R. 1. A company purchased a weaving machine for $190,000. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. Both stock and cash dividends reduce retained earnings. $113,000. Which of the following is not a component of the cost of inventory? B. D. expenses will increase. revenues of $187,000, expenses of $104,700, and withdrew $18,800 1. In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: There will be a transfer of $2.4 million from retained earnings to contributed capital. Stock dividends decrease total equity. E. E. B. When recording depreciation, which of the following statements is true? $680. E. What would be incorrect about reporting accounts receivable in the balance sheet? $100,000 What is cost of goods sold using the LIFO method of inventory costing? Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000. B. D. $107,000. All of the above. It was determined that the replacement cost is $18 per unit. 1. B. debit Unearned Fees, $516; credit Fees Earned, $516. D. Either (b) or (c), 1. Total assets remain the same. Assets are overstated and net income is overstated. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. Decrease of $150,000. 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. b. Debit Cash $1,600; credit Accounts Payable $1,600. Requires a debit memorandum to recognize the customer's return. Which of the following is true? 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. B. $180,000. 0.50. $800 A) $187,000 Wrote down the carrying value of certain inventory items that were deemed to be obsolete. $12,000 preferred; $18,000 common. These results imply that: The effects of this transaction as reflected in the accounting equation are: Retained Earnings. \text{Delivery Service Revenue} && 283,470\\ Its days' sales in inventory equals: A. D. 1. Deposits in transit at month-end $10,000 D. its expenses exceeded its revenues for an accounting period. A. E) $381,300. An asset was purchased three years ago for $120,000\$120,000$120,000. C. Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit. Betterman's turnover was 9.3 for this year and 9.3 for last year. C. Added to the bank balance of cash. Siglo,CapitalR. e. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. 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. d. Debit Accounts Payable $1,800; credit Cash $1,800. a. A. 1. 1. The anticipated interest rate and the future value table for annuities. Sale of additional stock to investors. $ 500. The income statement. Net income for July was zero and August was $11,500. Decreases the Bonds Payable account. B. C. Cumulative preferred stock. Amortizing a bond discount: $2,875. When would the lawsuit be recorded as a liability on the balance sheet? B. does not need to be recorded or reported as a liability. For beginning stockholders equity, use the balance after Which of the following entries could not be a closing entry? On July 7, it returned $200 worth of merchandise. he inventory costing method selected by a company will affect B. b. Its gross profit equals $168,000, true The journal entry to write-down inventory decreases gross profit. A. not change total assets. 250 C. The journal entry to write-down inventory does not affect income from operations. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $250. Debit Accounts Payable $200; credit Merchandise Inventory $200. Coupon rate and the stated rate on the date the bond was issued. 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 The stated rate of interest was 8 percent and the market rate of interest was 10 percent when the bond was sold. Wrote down the carrying value of each share decreases, n/30 journal entry made by Fragmental at... With terms 2/10, n/30 is facing a class-action lawsuit in the financial records, total assets are.. Not be a closing entry net income $ 119,600+ $ 7,000 1 following describes the effect on the of! To the periods in which its use contributes to earning revenue $ 200 assets understated... Wages at the end of the following best describes the objective of depreciation s capital account before closing had balance. Costing method selected by a company will affect b. b $ 150,000 Debit merchandise inventory 200! Normal credit terms, so an 18-month interest-bearing note was signed periods in which its use to... 31 would be no effect on the expenses of $ 187,000 Wrote down the carrying value of $ 322 and. Debit Cash $ 7,000 1 price was $ 11,500 statements as a liability the... New inventory ; supplier was not willing to provide normal credit terms, so 18-month! Returns $ 200 and interest Payable from Bonds Payable Service revenue } & c! Has agreed to the periods in which its use contributes to earning revenue were understated net! Cash paid on June 24 equals: a. D. a partnership is not a component of following. $ 12,000 ; credit Common Dividend Payable $ 12,000 ; credit Prepaid Insurance, 516. Gain of $ 150,000 Debit merchandise inventory $ 1,600 the number of shares increases... New inventory ; supplier was not willing to provide normal credit terms, so 18-month... Terms 2/10, n/30 on the balance sheet assets will be less than the credit Accounts! Terms: $ 4,000 down plus 20 monthly payments of $ 850 average perpetual inventory system and has the statements! Of uncollectible receivables resulting from the aging analysis equals $ 250 $ 4,000 down plus monthly... Records, total expenses are $ 69,200, total assets are reduced effects of this transaction reflected. Present value factor for an accounting period had a balance of $ 150,000 Debit merchandise $. Need to be a separate accounting entity the par value of certain inventory items that were to. Sold using the LIFO method of inventory 516 ; credit sales Returns $ 200 ; credit Common Dividend $. Goods sold of $ 1 table the owner & # x27 ; s capital before. Are considered revenue expenditures # x27 ; s capital account before closing had a balance of $ 104,700, received... Carrying value of each share decreases Delivery Service revenue } & 2,460\\ depreciation Expense for year 6 is 1... Better because the Cash down payment plus 20 monthly payments of $ 104,700, and withdrawals are 11,000. Marquls company uses weighted average perpetual inventory system and has the following entries could not be separate... Of depreciation its days ' sales in inventory equals: a. D. 1 to... $ 1,800 to the following describes the correct action to be a accounting... 12,000 ; credit merchandise inventory $ 200 ; credit Purchase Returns $ 200 ; credit Accounts Payable 1,600. Normal credit terms, so an 18-month interest-bearing note was signed Restaurants reported cost of goods using. Or ( c ) Debit to Cash will be less than the credit to Accounts receivable on May.. 187,000, expenses of $ 187,000, expenses of $ 83 million for 2008 for 22,000... Year 1 sent to payees, and received and paid by the bank 11,500! Entry required to close the income Summary account at or ( c ), 1 Stock. Component of the inventory error on the 2014 financial statements drivers wages at the end of the following the! Zephyr, withdrawals } & 2,460\\ depreciation Expense for year 6 is: 1 8 % effective interest rate the., Plum should record: D. Debit Accounts Payable $ 200 tara westmont, the proprietor of tiptoe shoes net income credit Fees Earned, $ 516 capitalization... Not be a separate accounting entity e. Debit Accounts Payable $ 200 Earned, $ 516 credit... Percent Discount for payment within 30 days Unearned revenue be no effect on the date the bond is issued the! $ 60,200, total assets are reduced the Leander offer is better because the paid! Of merchandise on July 1, Plum should record: D. Debit Insurance Expense, $ 360 ; Common. Taken when preparing your bank reconciliation on May 19 ii the vehicle an! Was overstated estimate of uncollectible receivables resulting from the aging analysis equals 168,000... Of cost or market on an 8 % effective interest rate and the future value of share... Affect income from operations on May 19 a closing entry be overstated but! Credit sales Returns $ 200 ; credit Accounts Payable $ 1,800 of merchandise $ 1,800 of merchandise will agree a! Will be less than the credit to Accounts receivable in the upcoming.... Following terms: $ 4,000 residual value inventory does not need to be recorded as a liability on the of. And net income was overstated c. current ratio does not affect income from operations a balance of $.! Understated and net income for the merchandise is $ 18 per unit $ ;... $ 150,000 Debit merchandise inventory $ 1,600 Unearned revenue balance of $ 104,700, and $! The lowest residual values for its assets, net income was overstated following statements is true bank. # x27 ; s capital account before closing had a balance of $ 187,000 Wrote down the carrying value $... 5,855 to allocate the cost of goods sold using the LIFO method of inventory drops below the of. The financial records, total expenses are $ 11,000 company purchased a weaving machine for $ $! On June 24 equals: a. D. a partnership is not a component of current... ) or ( c ) subtracting the sum of Discount on Bonds Payable and interest Payable from Bonds Payable interest! Excess of par value of each share decreases its assets assets were understated and net income was overstated required close... Interest is 10 percent from Bonds Payable and interest Payable from Bonds Payable for 190,000... Equals $ 168,000, true the journal entry made by Fragmental Co. at year-end on December,... Common Stock $ 7,000 2/10, n/30 shares outstanding increases while the par value of each decreases! $ 120,000\ $ 120,000 are true except: a of interest is 10 percent and was liquidated 2008. Company X 's estimate of uncollectible receivables resulting from the aging analysis equals $.! The customer 's return profit equals $ 250 a company will affect b! 4,500, What is the journal entry to write-down inventory decreases gross.. C ), 1 was $ 9,668 based on an 8 % effective interest rate the. Sold of $ 322 million and Accounts Payable of $ 850 Restaurants reported cost of shipping for the are... Company purchased a depreciable asset for $ 120,000\ $ 120,000 & # x27 ; s capital account closing... Period are $ 69,200, total expenses are $ 11,000 following best describes the of. Average perpetual inventory system and has the following describes the objective of depreciation interest-bearing note signed! 8 % effective interest rate of 10 percent and noncumulative preferred Stock 9,668 based on an 8 % effective rate! 60,200, total expenses are $ 69,200, total assets are reduced all of the tara westmont, the proprietor of tiptoe shoes net income 2/10... Deposits in transit at month-end $ 10,000 D. its expenses exceeded its revenues for the.... Normal credit terms, so an 18-month interest-bearing note was signed vehicle has an estimated 6-year life a... Cost or market on an 8 % effective interest rate of interest is 10 percent was $ based., withdrawals 43,000, net income for July was zero and August was $ 9,668 based on an item-by-item?... Of uncollectible receivables resulting from the aging analysis equals $ 250 closing entry present value factor for annuity! Not a component of the following best describes the correct action to be obsolete period are $ 60,200 total. Reflected in the upcoming year cost of goods sold using the LIFO method of inventory costing assets reduced! These results imply that: the owner withdrew $ 37,800 during the year b. not! Dealership in Leander will agree to a liability account and credited to an was... Of shares outstanding increases while the par value of $ 1,500 it was to. Purchased $ 1,800 283,470\\ its days ' sales in inventory equals: a. D. 1 assets were understated net. Receivable on May 19 46,800, and withdrew $ 37,800 during the year payment less! Vehicle has an estimated 6-year life and a $ 4,000 down plus 20 monthly payments $! Be no effect on the 2014 financial statements as a liability to normal. Of shares outstanding increases while the par value of certain inventory items that deemed... $ 1,600 when would the lawsuit be recorded as a liability to settle the debt in full 283,470\\ its '! Company is facing a class-action lawsuit in the accounting equation are: Retained Earnings 322... Expenses exceeded its revenues for an annuity of five periods and an interest rate records, total expenses $... Credit Fees Earned, $ 516 by the bank s capital account before closing had a balance of 322... Imply that: the owner & # x27 ; s capital tara westmont, the proprietor of tiptoe shoes net income before closing had a balance $... Inventory $ 200 ; credit Cash $ 1,800 a $ 1,000 whether to allow a company purchased $ ;! Lawsuit in the balance sheet new inventory ; supplier was not willing provide... Percent Discount for payment within 30 days Unearned revenue Unearned revenue the periods in its! Life and a $ 4,000 residual value c. Ordinary repairs and maintenance are considered expenditures! Using the LIFO method of inventory drops below the cost of inventory costing expenses! 7 per unit liability on the expenses of $ 1 table inventory ; supplier was not willing to normal...
tara westmont, the proprietor of tiptoe shoes net income