Liabilities represent an "outside" interest in a business, as they are obligations or debts owed to creditors or other entities.
They are a financial obligation that the business owes to someone else, and they can include things like loans, credit card balances, and accounts payable.
How are they outside interests?Liabilities are financial obligations that a business incurs as part of its operations. They can include short-term liabilities, such as accounts payable and short-term loans, and long-term liabilities, such as long-term loans and bonds.
Liabilities are typically recorded on a company's balance sheet, which is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time
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A bachelors degree in which of the following areas is a good choice for an arts an communication manager?
A. business
B. art history
C. theater
Golden Eagle Company prepares monthly financial statements for its bank. The November 30 and December 31 adjusted trial balances include the following account information:
30-Nov 31-Dec
debit   credit debit credit
supplies $2,000 $3,500
prepaid Insurance $8,000 $6,000
salaries payable $11,000 $16,000
unearned revenue $3,000 $1,500
The following information also is known:
a. Purchases of supplies during December total $3,500.
b. Supplies on hand at the end of December equal $3,000.
c. No insurance payments are made in December.
d. Insurance cost is $1,500 per month.
e. November salaries payable of $10,000 were paid to employees in December. Additional salaries for December owed at the end of the year are $15,000. On November 1, a tenant paid Golden Eagle $3,000 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.
Required:
Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned revenue on December 31.
Answer:
Golden Eagle Company
Adjusting Journal Entries:
a. Debit Supplies $3,500
Credit Cash $3,500
To record the purchase of supplies during December.
b. Debit Supplies Expense $2,500
Credit Supplies $2,500
To record the used supplies for the month.
d. Debit Insurance Expense $1,500
Credit Prepaid Insurance $1,500
To record expired insurance expense for the month.
e. Debit Salaries Payable $10,000
Credit Cash $10,000
To record the payment of salary arrears.
f. Debit Salaries Expense $15,000
Credit Salaries Payable $15,000
To record unpaid salaries for the month.
g. Debit Unearned Revenue $1,000
Credit Earned Revenue $1,000
To record earned revenue for the month.
Explanation:
a) Data and Calculations:
Golden Eagle Company
Adjusted Trial Balances as of November 30 and December 31 (Partial):
30-Nov 31-Dec
Debit Credit Debit Credit
supplies $2,000 $3,500
prepaid Insurance $8,000 $6,000
salaries payable $11,000 $16,000
unearned revenue $3,000 $1,500
Adjusting Entries for Supplies, Prepaid Insurance, Salaries Payable and Unearned Revenue on December 31:
a. Supplies $3,500 Cash $3,500
b. Supplies Expense $2,500 Supplies $2,500
d. Insurance Expense $1,500 Prepaid Insurance $1,500
e. Salaries Payable $10,000 Cash $10,000
f. Salaries Expense $15,000 Salaries Payable $15,000
g. Unearned Revenue $1,000 Earned Revenue $1,000
Problem 3 (Current Liability Entries and Adjustments) Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system: 1. On February 2, the corporation purchased goods from Martin Company for $70,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $50,000 from General Motors Company, paying $4,000 in cash and signing a 1-year, 12% note for the balance of the purchase price. 3. On May 1, the corporation borrowed $83,000 from Chicago National Bank by signing a $92,000 zerointerest-bearing note due 1 year from May 1. 4. On August 1, the board of directors declared a $300,000 cash dividend that was payable on September 10 to stockholders of record on August 31. Instructions (a) Make all the journal entries necessary to record the transactions above using appropriate dates. (b) Edwardson Corporation's year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at December 31. Assume straight-line amortization of discounts.
Answer:
1. February 2
Dr Purchases68,600
Cr Account payable 68,600
February 26
Dr Account payable 68,600
Dr Purchase Discount loss 1,400
Cr Cash 70,000
December 31
No adjustment necessary
2. April 1
Dr Trucks 50,000
Cr Cash 4,000
Cr Note payable 46,000
December 31
Dr Interest expenese 4,140
Cr Interest Payable 4,140
3. May 1
Dr Cash 83,000
Dr Discount on notes payable 9,000
Cr Notes payable 92,000
December 31
Dr Interest expense 6,000
Cr Discount on notes payable 6,000
4. Aug 1
Dr Dividend $300,000
Cr Dividend payable $300,000
Sept 10
Dr Dividend payable$300,000
Cr Cash $300,000
December 31
No adjustment necessary
Explanation:
Preparation of the journal entries
1. February 2
Dr Purchases68,600
[$70,000 * (100%-2%)]
Cr Account payable 68,600
February 26
Dr Account payable 68,600
Dr Purchase Discount loss 1,400
(70,000-68,600)
Cr Cash 70,000
December 31
No adjustment necessary
2. April 1
Dr Trucks 50,000
Cr Cash 4,000
Cr Note payable 46,000
(50,000-4,000)
December 31
Dr Interest expenese 4,140
Cr Interest Payable 4,140
($46,000* 12% * 9/12 = $4,140)
3. May 1
Dr Cash 83,000
Dr Discount on notes payable 9,000
Cr Notes payable 92,000
December 31
Dr Interest expense 6,000
Cr Discount on notes payable 6,000
($9,000 * 8/12 (STRAIGHT-LINE) = $6,000)
4. Aug 1
Dr Dividend $300,000
Cr Dividend payable $300,000
Sept 10
Dr Dividend payable$300,000
Cr Cash $300,000
December 31
No adjustment necessary
The total amount of depreciation recorded against an asset over the entire time the asset has been owned: Multiple Choice Is shown on the income statement of the final period. Is referred to as an accrued asset. Is only recorded when the asset is disposed of. Is referred to as depreciation expense. Is referred to as accumulated depreciation.
Answer:
Is referred to as accumulated depreciation.
Explanation:
Depreciation can be defined as the reduction of cost of a fixed asset systematically until the value of the asset becomes zero.
The Modified Accelerated Cost Recovery System (MACRS) can be defined as a depreciation system that avails business owners or companies the ability and opportunity to recover or recoup the cost basis of physical assets that have experienced deterioration over a specific period of time.
In the United States of America, the Modified Accelerated Cost Recovery System (MACRS) is used mainly for tax purposes because it gives room for faster depreciation of a physical asset in its first years or initial usage and reduces depreciation as it is being used over a long period of time.
Hence, the total amount of depreciation recorded against an asset over the entire time the asset has been owned is referred to as accumulated depreciation.
Blaine Air Transport Service, Inc., providing air delivery service for businesses, has been in operation for three years. The following transactions occurred in February: February 1 Paid $250 for rent of hangar space in February. February 2 Purchased fuel costing $580 on account for the next flight to Dallas. February 4 Received customer payment of $860 to ship several items to Philadelphia next month. February 7 Flew cargo from Denver to Dallas; the customer paid $840 for the air transport. February 10 Paid $170 for an advertisement in the local paper to run on February 19. February 14 Paid pilot $2,500 in wages for flying in January (recorded as expense in January). February 18 Flew cargo for two customers from Dallas to Albuquerque for $4,100; one customer paid $1,600 cash and the other asked to be billed. February 25 Purchased on account $2,460 in spare parts for the planes. February 27 Declared a $130 cash dividend to be paid in March.
Required:
Prepare journal entries for each transaction. Be sure to categorize each account as an asset (A), liability (L), stockholders
Answer:
Following are the journal entries for each transaction:
Explanation:
Date Account-title Dr. Cr.
February 1 expense of rent 250
Cash 250
February 2 expense of fuel 580
Payable Accounts 580
February 4 Cash 860
Unearned income 860
February 7 Cash 840
Transport income 840
February 10 Advertising expense 170
Cash 170
February 14 Payable Wages 2500
Cash 2500
February 18 Cash 1800
Accounts receivable (4100-1600) 2500
Transport income 4100
February 25 Supplies 2460
Payable Accounts 2460
February 27 Retained earnings/ Cash dividend 130
Dividends payable 130
The three dates related to a cash dividend include which of the following:
a. Date of declaration
b. Date of payment
c. Date of issuance
d. Date of record
e. Date of payable
Answer: a. Date of declaration
b. Date of payment
d. Date of record
Explanation:
The three dates that are related to a cash dividend are:
Date of declaration - This is the date that a particular company is being binded to pay its dividend.
Date of payment - This simply means the date when dividend is paid to the stockholders.
Date of record - This is the date for the identification of recipients.
Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $354,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 4% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $1,400 before adjustment
Answer:
Dr Bad Debt Expense $12,760
Cr Allowance for Doubtful Accounts $12,760
Explanation:
Based on the information given the adjusting journal entry that Tanning Company will make if the Allowance for Doubtful Accounts has a credit balance of the amount of $1,400 before adjustment will be :
Dr Bad Debt Expense $12,760
Cr Allowance for Doubtful Accounts $12,760
[(4%*$354,000)-$1,400]
100 POINTS PLS HELP
In the hiring process are people who are willing to confirm the job candidate's previous employment
and discuss the candidate's qualifications for the job being applied for
A. Subcontractors
В. Classifieds
C. Personnel
D. References
Answer:
D. references
Explanation:
:)
ProTech began business at the start of the current year. The company planned to produce 40,000 units, and actual production conformed to expectations. Sales totaled 37,000 units at $42 each. Costs incurred were:
Variable manufacturing overhead per unit
$
19
Fixed manufacturing overhead
240,000
Variable selling and administrative cost per unit
7
Fixed selling and administrative cost per unit
140,000
If there were no variances, the company's absorption-costing income would be ___________
Answer:
Net operating profit= $230,000
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
First, we need to calculate the unitary cost:
Unitary production cost= 19 + (240,000/40,000)
Unitary production cost= $25
Now, the income statement:
Sales= 37,000*42= 1,554,000
COGS= (37,000*25)= (925,000)
Gross profit= 629,000
Total selling and administrative cost= (7*37,000) + 140,000= (399,000)
Net operating profit= $230,000
Which benefit of market research does this example convey?
Jennifer works as a marketing manager for her company. Over the last year, she and her staff conducted many telephone and focus group
surveys, as well as interviews, to collect market research data from the company's existing customers. In the process, the research team
interacted with many customers and established a good rapport with them. This helped the business reap the benefits of
Answer:
customer loyalty
Explanation:
Customer loyalty: Through market research, a business communicates with its consumers. Consumers can give opinions and express grievances through the market research process. Such interaction can help a business establish a strong rapport with its consumers, which leads to customer loyalty.
Answer:
Costumer Loyalty
Explanation:
I took this exact test:
Type the correct answer in the box. Spell all words correctly.
Which benefit of market research does this example convey?
Jennifer works as a marketing manager for her company. Over the last year, she and her staff conducted many telephone and focus group surveys, as well as interviews, to collect market research data from the company’s existing customers. In the process, the research team interacted with many customers and established a good rapport with them. This helped the business reap the benefits of BLANK
Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.Statement Consumer Surplus Producer Surplus Neither
I sold a jersey sweater for $25, even though I was willing to go as low as $20 in order to sell it.
Even though I was willing to pay up to $32 for a used laptop and even though the seller was willing to go as low as $27 in order to sell it, we couldn't reach a deal because the government imposed a price ceiling of $17 on the sale of laptops.
Even though I was willing to pay up to $48 for a used textbook, I bought a used textbook for only $39.
Answer:
I sold a jersey sweater for $25, even though I was willing to go as low as $20 in order to sell it.
Supplier surplus. Supplier surplus = price of the good - lowest price a producer is willing to accept for the good = $25 - $20 = $5
Even though I was willing to pay up to $32 for a used laptop and even though the seller was willing to go as low as $27 in order to sell it, we couldn't reach a deal because the government imposed a price ceiling of $17 on the sale of laptops.
Neither, since no transaction was made.
Even though I was willing to pay up to $48 for a used textbook, I bought a used textbook for only $39.
Consumer surplus. Consumer surplus = maximum price a consumer is willing to pay for a good - actual price of the good = $48 - $39 = $9
Suppose a company is currently manufacturing 39 smartphones per day. The variable cost is $120 per smartphone with daily fixed costs totaling $684. What is the least number of smartphones that need to be produced each day in order to sell the smartphones for $132 each and earn a profit? radioImage a) 55 radioImage b) 53 radioImage
Answer:
57 smartphones per day
Explanation:
contribution margin per each smartphone = $132 - $120 = $12
total daily fixed costs = $684
break even point in units = total fixed costs / contribution margin per unit = $684 / $12 = 57 smartphones per day
break even in $ = 57 x $132 = $7,524 total daily sales
In January 2020, Ezra purchased 2,000 shares of Gold Utility Mutual Fund for $20,000. In June, Ezra received an additional 100 shares as a dividend, in lieu of receiving $1,000 in cash dividends. In December, the company declared a two-for-one stock split. Ezra received an additional 2,100 shares, but there was no option to receive cash. At the time of the stock dividend in December and at the end of the year, the fund shares were trading for $5 per share. Also, at the end of the year, the fund offered to buy outstanding shares for $4.50. Ezra did not sell any shares during the year.
If an amount is zero, enter "0".
a. What is Ezra's gross income from the 100 shares received in June?
$X
b. What is Ezra's gross income from the receipt of the 2,100 shares as a two-for-one stock split in December?
$X
c. Should Ezra be required to recognize gross income in 2016 even though the fair market value of his investment at the end of the year was less than the fair market value at the beginning of the year?
Answer:
a. Ezra's gross income from the 100 shares received in June is $1,000.
b. Ezra's gross income from the receipt of the 2,100 shares as a two-for-one stock split in December is equal to $0.
c. The $1,000 gross income realized by Ezra in 2016 will be recognized by him. Also, when the shares are sold by Ezra, he is allowed to deduct an economic loss.
Explanation:
a. What is Ezra's gross income from the 100 shares received in June? $X
Since it is not stated that the price per share changed from January to June, we have:
Price per share in June = Amount of shares purchased in January / Number of shares purchased in January = $20,000 / 2,000 = $10
Gross income from 100 shares received in June = Price per share in June * Number of shares received = $10 * 100 = $1,000
This shows that gross income is equal to the amount of the cash dividends Ezra would have received if he had not receive an additional 100 shares as a dividend.
Therefore, Ezra's gross income from the 100 shares received in June is $1,000.
b. What is Ezra's gross income from the receipt of the 2,100 shares as a two-for-one stock split in December? $X
The impact of two-for-one stock split is to increase the number of shares of the company by 50% but also to reduce its price per per by 50%. As a result, the total value of shares held by each shareholders remains the same.
Since the total value of shares held by Ezra remains the same, this implies that Ezra's gross income from the receipt of the 2,100 shares as a two-for-one stock split in December is equal to $0.
c. Should Ezra be required to recognize gross income in 2016 even though the fair market value of his investment at the end of the year was less than the fair market value at the beginning of the year?
The $1,000 gross income realized by Ezra in 2016 will be recognized by him. Also, when the shares are sold by Ezra, he is allowed to deduct an economic loss.
Sandia Inc. wants to acquire a $360,000 computer-controlled printing press. If owned, the press would be depreciated on a straight-line basis over 10 years to a book salvage value of $0. The actual cash salvage value is expected to be $25,000 at the end of 10 years. If purchased, Sandia will incur annual maintenance expenses of $3,000. These expenses would not be incurred if the press is leased. If the press is purchased, Sandia could borrow the needed funds at an annual pre-tax interest rate of 10%. The lease rate would be $48,000 per year, payable at the beginning of each year. If Sandia has an after-tax cost of capital of 12% and a marginal tax rate of 40%, what is the net advantage to leasing? a. $37,737 b. $65,543 c. $60,713 d. $57,173
Answer:
a. $37,737
Explanation:
Present value of Cost of Buying = The Cost of Press + [(Post Tax annual maintenance expenses - Annual Depreciation Tax shield)*PVIFA (6%,10)] - [Post tax Salvage Value*PVIF (12%,10)]
PV of Cost of Buying = 360000 + (3000*(1-40%)-360000/10*40%)*7.360 - 25000*(1-40%) * 0.322
PV of Cost of Buying = $262,434
Present value of Cost of Leasing = Post tax Lease Payment at the Beginning *(1+PVIFA(6%,9))
PV of Cost of Leasing = $48000*(1-40%)*(1+6.802)
PV of Cost of Leasing = $224,697
Net advantage to leasing = PV of Cost of Buying - PV of Cost of Leasing
Net advantage to leasing = $262,434 - $224,697
Net advantage to leasing = $37,737
Papa John’s is one of the fastest-growing pizza delivery and carry-out restaurant chains in the country. Presented here are selected income statement and balance sheet amounts (dollars in thousands). Current Year Prior Year Net sales $ 1,242,087 $ 1,242,087 Net income 51,796 22,735 Average shareholders' equity 121,445 134,536 Average total assets 390,143 397,728 Required: 1. Compute ROA for the current and prior years. (Round your answers to 3 decimal places.)
Answer and Explanation:
The computation of the return on assets for the current and prior years are as follows:
As we know that
Return on assets = Net income ÷ average total assets
For current year
= $1,242,087 ÷ $390,143
= 3.184
And, for the prior year
= $1,242,087 ÷ $397,728
= 3.123
Kevin Jones, of Elon, North Carolina, is single and recently graduated from law school. He is employed and earns $9,000 per month, an awesome salary for someone only 26 years old. He also has $1,600 withheld for federal income tax, $520 for state income taxes, $690 for Medicare and Social Security taxes, and $220 for health insurance every month. Kevin has outstanding student loans of almost $80,000 on which he pays about $950 per month and a 0% loan on an auto loan payment of $300 on a Ford Fusion Hybrid he purchased new during law school. He is considering taking out a loan to buy a Kawasaki motorcycle.
Required:
a. What is kevins debt payments to disposable income ratio?
b. Based on your answer to part (a), how would you advise kevin about his plan.
Answer:
Kevin Jones
a. Kevin's debt payments to disposable income ratio = 21%
b. The first question that Kevin should ask himself is whether he actually requires the Kawasaki motorcycle and for what purpose. Since he is already paying for a new auto that he purchased during law school, Kevin should try to limit his expenses to enable him save money for retirement. He has enough debts now. He should consider paying off his loans or rather investing some reasonable savings. The earlier he does, the better for him.
Explanation:
a) Data and Calculations:
Monthly salary = $9,000
Monthly Deductions:
Federal income tax withheld = $1,600
State income taxes = 520
Medicare & Social Security taxes = 690
Health insurance = 220
Total deductions = $3,030
Monthly Disposable income = $5,970 ($9,000 - $3,030)
Debt payments:
Outstanding student loans = $80,000
Monthly repayment of student loans = $950
Auto loan = $300
Total monthly debt payments = $1,250
Debt payments to Disposable income ratio = $1,250/$5,970 = 0.209
= 21%
Scott wanted to start a lawn cutting service but needed to purchase a lawnmower. Sherif gave Scott $30 in exchange for company revenue. What does Sherif now have in Scott's company?
A.) Rebate.
B.) Investment.
C.) Stock.
D.) Bond.
Answer:
C.) Stock.
Explanation:
Since in the question it is mentioned that scott wanted to begin the lawn cutting service but required to buy the lawnmower.Here sherif given $30 in exchange for the revenue of the company.
So according to the given options, the option c should be selected as the sherif has the stock by which the revenue would be exchanged
Therefore option c is correct
Answer:
The answer is C. Stock. ❤️
Assume Bank XYZ has 3 assets and 4 liabilities, with the following information: Assets Liabilities yield dollar value cost dollar value 5% 1,000 0% 3,000 10% 4,000 2% 1,000 20% 2,000 4% 1,000 6% 1,000 We also know the noninterest income is 1,000, the noninterest expense 1,200, the provision for loan losses 50, the realized securities gains and losses 40, and the tax 20. What is the net income of Bank XYZ
Answer:
The answer is "$500".
Explanation:
Calculating the total Interest Income:
[tex]= \$( 5\% \times 1000+10\% \times 4000+20\% \times 2000)\\\\= \$( \frac{5}{100} \times 1000+ \frac{10}{100} \times 4000+ \frac{20}{100} \times 2000)\\\\=\$ (50+400+400) \\\\ =\$ 850[/tex]
Profits of non-interest=$1000
Earnings and losses for shares = $40
For point 1:
The formula for Total Revenue: [tex]= \text{Total Interest Income}+ \text{Non Interest Income} + \text{Realized Securities gains and losses} \\[/tex]
[tex]= \$(850+1000+40) \\\\ = \$ 1890[/tex]
For point 2:
The formula for total Expenditure: [tex]\text{(Interest Expense+Non interest expense+Provision for losses+Taxes)}[/tex]
[tex]\text{Interest expense}= \$( 2 \% \times 1000+4\% \times 1000+6\% \times 1000)[/tex]
[tex]= \$( \frac{2}{100} \times 1000+ \frac{4}{100} \times 1000+ \frac{6}{100} \times 1000) \\\\= \$ (20+40+60)\\\\ =\$ 120[/tex]
Expenditure for non-interest=$1200
Loan and damage provisions = $50
Tax = $20
Complete Expenditures[tex]= \$(120+1200+50+20) = \$ 1390[/tex]
Therefore,[tex]\text{net sales = (Total Revenue-Total Expenditure)}[/tex]
[tex]=\$(1890-1390) \\\\ = \$ 500[/tex]
Sagon Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $97,000 and the total of the credits to the account was $67,000. Which of the following statements is true?
A. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $75,000.
B. Actual manufacturing overhead incurred during the month was $56,000.
C. Manufacturing overhead applied to Work in Process for the month was $75,000.
D. Manufacturing overhead for the month was underapplied by $19,000.
Answer:
Manufacturing overhead for the month was underapplied by $30,000.
Explanation:
Since it is given that
The debit to the manufacturing overhead is $97,000
And, the total credit is $67,000
So, the remaining amount would be
= $97,000 - $67,000
= $30,000
This $30,000 represent the underapplied overhead
This is the correct answer but the same is not provided in the given options
Question 6 of 10
Match each company, organization, or agency with the correct label.
Consumer
Reports
?
consumer advocacy
publication
Federal Trade
Commission
(FTC)
?
consumer protection
agency
Food and Drug
Administration
(FDA)
?
competition regulator
Answer:
I. Consumer Reports: consumer advocacy publication.
II. Federal Trade Commission (FTC): competition regulator.
III. Food and Drug Administration (FDA): consumer protection agency.
Explanation:
I. Consumer Reports: consumer advocacy publication. It is a non-profit organization in the United States of America saddled with the responsibility of consumer advocacy, investigative journalism, product testing and the enlightening of the general public.
II. Federal Trade Commission (FTC): competition regulator. It is an agency of the government of the United States of America saddled with the responsibility of promoting consumer protection and the enforcement of all civil antitrust laws.
III. Food and Drug Administration (FDA): consumer protection agency. It is a federal agency of the government of the United States of America saddled with the responsibility of protecting the consumers of edible products and public health safety.
Presented below are various account balances of K.D. Lang Inc.
a. Unamortized premium on bonds payable, of which $3,000 will be amortized during the next year.
b. Bank loans payable of a winery, due March 10, 2024. (The product requires aging for 5 years before sale.)
c. Serial bonds payable, $1,000,000, of which $200,000 are due each July 31.
d. Amounts withheld from employees' wages for income taxes.
e. Notes payable due January 15, 2023.
f. Credit balances in customers' accounts arising from returns and allowances after collection in full of account.
g. Bonds payable of $2,000,000 maturing June 30, 2021.
h. Overdraft of $1,000 in a bank account. (No other balances are carried at this bank.)
i. Deposits made by customers who have ordered goods.
Required:
Indicate whether each of the items above should be classified on December 31, 2024, as a current liability, a long-term liability, or under some other classification.
Answer:
a. Unamortized premium on bonds payable, of which $3,000 will be amortized during the next year.
Indication: Unamortized premium is a contra liability account and amortization is an expense account
b. Bank loans payable of a winery, due March 10, 2024. (The product requires aging for 5 years before sale.)
Indication: Long Term Liability
c. Serial bonds payable, $1,000,000, of which $200,000 are due each July 31.
Indication: 800000, Long term liability and 200000 current liability
d. Amounts withheld from employees' wages for income taxes.
Indication: Current Liability
e. Notes payable due January 15, 2023.
Indication: Long Term Liability
f. Credit balances in customers' accounts arising from returns and allowances after collection in full of account.
Indication: Account Receivable i
g. Bonds payable of $2,000,000 maturing June 30, 2021.
Indication: Current Liability
h. Overdraft of $1,000 in a bank account. (No other balances are carried at this bank.
Indication: Current Liability
i. Deposits made by customers who have ordered goods.
Indication: Current Liability
After graduating college, you receive $10,000 and decide to put it in a high yield saving account. The account earns 0.50% compounded quarterly. a) (8 points) What is the effective annual interest rate? b) (7 points) If you leave your initial investment of $10,000 in the account without any withdrawals what would you expect the value of the account to be after 4 years?
Answer:
a)
The effective annual interest rate is 0.5009%
b)
I will expect $10,201.88 the value of the account after 4 years
Explanation:
a)
Use the following formula to calculate the effective annual interest rate
Effective annual Interest rate = ( ( 1 + Interest rate / Compounding period per year )^Compounding period per year ) - 1
Where
Interest rate = 0.50%
Compounding period per year = 4 quarters in a year
Placing values in the formula
Effective annual Interest rate = ( ( 1 + 0.5% / 4 )^4 ) - 1 = 0.005009 = 0.5009%
b)
Use the following formula to calculate the value after 4 years
Value after 4 years = Current Investment x ( 1 + Periodic Interest rate )^numbers of period
Where
Current Investment = $10,000
Periodic Interest rate = 0.50% / 4 = 0.125%
Numbers of period = Compounding Periods per year x Numbers of years = 4 quarters per year x 4 years = 16 quarters
Placing values in the formula
Value after 4 years = $10,000 x ( 1 + 0.125% )^16
Value after 4 years = $10,201.88
On December 31, Fighting Okra Cooking Services reports the following revenues and expenses.
Service revenue $77,000
Postage expense 1,600
Legal fees expense 2,500
Rent expense 10,800
Salaries expense 26,000
Supplies expense 15,500
In addition, the balance of common stock at the beginning of the year was $300,000, and the balance of retained earnings was $36,000. During the year, the company issued additional shares of common stock for $27,000 and paid dividends of $14,000.
Required:
a. Prepare an income statement.
b. Prepare a statement of stockholders' equity.
Answer:
See below
Explanation:
A. Income statement
Service revenue
$77,000
Less:
Postage expenses
$1,600
Legal fees expense
$2,500
Rent expense
$10,800
Salaries expense
$26,000
Supplies expense
$15,500
Net income
$20,600
B. Statement of stockholder equity
This is computed as
= Total assets - Total liabilities
= Retained earnings $36,00 + Dividends $14,000 + Net income $20,600 - $300,000
A company’s January 1, 2014 balance sheet reported total assets of $120,000 and total liabilities of $40,000. During January 2014, the following transactions occurred: (A) the company issued stock and collected cash totaling $30,000; (B) the company paid an account payable of $6,000; (C) the company purchased supplies for $1,000 with cash; (D) the company purchased land for $60,000 paying $10,000 with cash and signing a note payable for the balance. What is total stockholders’ equity after the transactions above?
A. $30,000.
B. $110,000.
C. $80,000.
D. $194,000.
Answer:
B. $110,000
Explanation:
Calculation for the total stockholders equity
First step is to calculate the Beginning equity
Beginning equity = $120,000 − $40,000
Beginning equity = $80,000.
Now let calculate the stockholders' equity
Stockholders' equity = $80,000 + $30,000
Stockholders' equity = $110,000
Therefore the total stockholders equity will be $110,000
old Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $330,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:
Raw materials $ 25,000
Work in process $ 10,000
Finished goods $ 40,000
During the year, the following transactions were completed:
Raw materials purchased on account, $275,000.
Raw materials used in production, $280,000 (materials costing $220,000 were charged directly to jobs; the remaining materials were indirect).
Costs for employee services were incurred as follows:
Direct labor $ 180,000
Indirect labor $ 72,000
Sales commissions $ 63,000
Administrative salaries $ 90,000
Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities).
Utility costs incurred in the factory, $57,000.
Advertising costs incurred, $140,000.
Depreciation recorded on equipment, $100,000. ($88,000 of this amount related to equipment used in factory operations; the remaining $12,000 related to equipment used in selling and administrative activities.)
Manufacturing overhead cost was applied to jobs, $ ? .
Goods that had cost $675,000 to manufacture according to their job cost sheets were completed.
Sales for the year (all paid in cash) totaled $1,250,000. The total cost to manufacture these goods according to their job cost sheets was $700,000.
Required:
1. Prepare journal entries to record the transactions for the year.
2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).
3A. Is Manufacturing Overhead underapplied or overapplied for the year?
3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
4. Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.)
Answer:
Req 1:
No Transaction General Journal Debit Credit
1 a. Raw materials 275,000
Accounts payable 275,000
2 b. Work in process 220,000
Manufacturing overhead 60,000
Raw materials 280,000
3 c. Work in process 180,000
Manufacturing overhead 72,000
Sales commisions expense 63,000
Admin salaries expense 90,000
Salaries and wages payable 405,000
4 d. Manufacturing overhead 13,000
Rent expense 5,000
Accounts payable 18,000
5 e. Manufacturing overhead 57,000
Accounts payable 57,000
6 f. Advertising expense 140,000
Accounts payable 140,000
7 g. Manufacturing overhead 88,000
Depreciation expense 12,000
Accumulated depreciation 100,000
8 h. Work in process 297,000
Manufacturing overhead 297,000
9 i. Finished goods 675,000
Work in process 675,000
10 j(1). Cash 1,250,000
Sales 1,250,000
11 j(2). Cost of goods sold 700,000
Finished goods 700,000
Req 2: Screenshot Attached
Req 3A:
Manufacturing Overhead is Overapplied
Req 3B:
Manufacturing Overhead 7,000
Cost of Goods Sold 7,000
Req 4: Screenshot Attached
Swinnerton Clothing Company's balance sheet showed total current assets of $3,300, all of which were required in operations. Its current liabilities consisted of $575 of accounts payable, $300 of 6% short-term notes payable to the bank, and $145 of accrued wages and taxes. What was its net operating working capital that was financed by investors? Select the correct answer. a. $2,573 b. $2,570 c. $2,580 d. $2,577 e. $2,566
Answer:
c. $2,580
Explanation:
Calculation for What was its net operating working capital that was financed by investors
Current assets $3,300
Less Accounts payable ($575)
Less Accrued wages and taxes ($145)
Net operating working capital $2,580
($3,300-$575-$145)
Therefore What was its net operating working capital that was financed by investors will be $2,580
Transactions Concrete Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Jason Payne, Capital; Jason Payne, Drawing; Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.
Transactions:
Oct. 1 Paid rent for the month, $2,800.
3 Paid advertising expense, $525.
5 Paid cash for supplies, $1,250.
6 Purchased office equipment on account, $9,300.
10 Received cash from customers on account, $16,600.
15 Paid creditors on account, $3,720.
27 Paid cash for miscellaneous expenses, $590.
30 Paid telephone bill (utility expense) for the month, $275.
31 Fees earned and billed to customers for the month, $50,160.
31 Paid electricity bill (utility expense) for the month, $830.
31 Withdrew cash for personal use, $1,700.
Journalize the following selected transactions for October 2019.
Answer:
Oct 1
Rent expense Dr. $2800
Cash Cr. $2800
(To record entry for payment of rent for month)
Oct 3
Advertising expenses Dr. $525
Cash Cr. $525
(To record entry for Advertising expenses)
Oct 5
Supplies Dr. $1250
Cash Cr. $1250
(To record entry for purchase of supplies)
Oct 6
Office equipment Dr. $9300
Accounts Payable Cr. $9300
(To record purchase of office equipment on account)
Oct 10
Cash Dr. $16600
Accounts Receivable Cr. $16600
(To record cash received from customers on account)
Oct 15
Accounts payable Dr. $3720
Cash Cr. $3720
(To record payment made to creditors)
Oct 27
Miscellaneous expenses Dr. $590
Cash Cr. $590
(To record repair expense of office equipment)
Oct 30
Telephone expense Dr. $275
Cash Cr. $275
(To record payment made for telephone bill)
Oct 31
Accounts receivables Dr. $50160
Service fees Cr. $50160
(To record fees earned )
Oct 31
Utility expense Dr. $830
Cash CR $830
(To record payment made for electricity bill)
Oct 31
Personal use Dr. $1700
Cash Cr. $1700
(To record payment of dividend)
George Gershwin Co. sold $2,000,000 of 10%, 10-year bonds at 104 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Gershwin uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020.
Answer:
July 1, 2020 $96,000
December 31, 2020 $96,000
Explanation:
Calculation to determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020.
Firststep is to get calculate the Premium amortization (Straight-line)
Issue price of the bonds $2,080,000
($2,000,000 x 1.04)
Less Par value of bonds ($2,000,000)
Premium on bonds payable $80,000
÷ Numbet of interest payments 20 times
(10 years x 2 times)
= Premium amortization (Straight-line) $4,000
($80,000÷20 times)
Now let calculate the Interest expense
Interest payment $100,000
(2,000,000 x 10% x 6/12)
Less Premium amortization ($4,000)
Interest expense $96,000
($100,000-$4,000)
Hence,using the straight line method, Interest expense will be $96,000 for every time.
Therefore the amount of interest expense to be reported on July 1, 2020 is $96,000, and December 31, 2020 is $96,000
Classified Balance Sheet The following accounts appear in an adjusted trial balance of Kangaroo Consulting. Indicate whether each account would be reported in the current asset; property, plant, and equipment; current liability; long-term liability; or stockholders' equity section of the December 31, 2015, balance sheet of Kangaroo Consulting.
1. Accounts Payable
2. Accounts Receivable
3. Accumulated Depreciation—Building
4. Cash
5. Common Stock
6. Note Payable (due in ten years)
7. Supplies
8. Wages Payable
Answer:
current asset
4. Cash2. Accounts Receivable7. Suppliesproperty, plant, and equipment
3. Accumulated Depreciation: BuildingContra asset account that decreases the carrying value of fixed assets.
current liability
1. Accounts Payable8. Wages PayableThey have to be paid within the following accounting period.
long-term liability
6. Note Payable (due in ten years)Has to be paid in more than 1 year.
stockholders' equity section
5. Common StockA company has a contract with the president that it has just hired. According to the contract a one-time payment of $24,800,000 will be paid to the president when he completes his first 9 years of service. For this purpose, the company would like to set aside equal amounts of money, once each year, in order to cover this anticipated large expense. The company can earn 8 percent on these amounts of money. How much will it need to set aside each year
Answer:
$1,985,976.79
Explanation:
The formula for finding the amount is :
A = FV/ annuity factor
Annuity factor = {[(1+r)^n] - 1} / r
FV = Future value = $24,800,000
A = Amount
R = interest rate = 8%
N = number of years = 9
Annuity factor = (1.08^9 - 1 ) / 0.08 = 12.487558
$24,800,000 / 12.487558 = $1,985,976.79